What Is Nakamoto-Gresham’s Law – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides


Bitcoin is money. That means it’s openly competing with the incumbent fiat monetary regime. A co-circulation of two types of money isn’t unprecedented, and the economic principle that describes the outcome is known as Gresham’s law. Applying Gresham’s insight to the bitcoin-fiat dynamic, we find that HODLing is economically rational under current conditions.

The Hierarchy Of Monetary Needs

To understand the rationality of HODLing, let’s briefly recap why an advanced civilization needs properly functioning money.

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