Rebutting Frances Coppola’s Misrepresentation of Gresham’s Law and the Nature of Money and Value

A strange article to read from Frances Coppola on the nature of the value proposition of bitcoin and its relation to Gresham’s law. There are agreeable points made, however, the way in which the author views fiat is at best not the most significant and relevant point of observation. The viewpoint from which Coppola expresses fiat ambiguates our understanding of the value and nature of money with respect to Gresham’s law. Here I disambiguate the confusion by inquiring into the significant meaning of fiat and its relation to good and bad money with respect to Gresham’s law.

“Let it Become”

It’s unclear here what thought experiment Frances means to convey:

What Is The Significant Definition Of Fiat?

Words can be given different definitions and sometimes this can be reasonable and sometimes it can be argued to be unreasonable. I don’t really need to argue that her example of “fiat” is unreasonable because I would rather argue that it's not significant.

Understanding Gresham’s Law in Regard to Fiat

The problem of misappropriating fiat here is that it leads Coppola to misapply Gresham’s law especially in regard to bitcoin and I feel this mistake stems from not having a (theoretically) stable metric for value for thought experiment purposes.

The Significance of the Introduction of a Deflationary Coinage

Coppola’s conclusion, much like many economists’ who try to comment on bitcoin, does not really fit with her preceding arguments. She attributes her described phenomenon and its relation to Gresham’s law as a symptom of bitcoin’s deflationary nature: