Silver is bad money while gold is good money. The bad money drives out the good money from circulation. That's why silver had been more widely used than gold through history. People spent silver but saved gold specie...
I suspect that very few people realize the true meaning of Gresham's Law, and especially as applied to gold and silver. Gresham's Law really says that, *where there is an artificially supported exchange rate between two monies*, the undervalued money will be hoarded, and only the overvalued money will be left in circulation.
Gresham's Law (or rather the principle behind it) would hold even in the case of a floating exchange rate (for example, Bitcoin vs USD). I have explained this
here (and in greater detail further on)...
Thanks man this is so interesting! I always thought in these terms even though I did not know anything about this Gresham's law.
This makes so much sense right now.