Quote from: btc4ever on February 01, 2014, 06:02:22 PM

Gresham's law only applies when free market currencies are not allowed to compete with fiat (by decree) currency.

Otherwise, Thier's law applies, and works in reverse.

from http://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham.27s_Law_.28Thiers.27_Law.29

Quote

These examples show that, in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. However, if not given the choice, and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their possession, and pass on the bad money to someone else. In short, in the absence of legal tender laws, the seller will not accept anything but money of certain value (good money), while the existence of legal tender laws will cause the buyer to offer only money with the lowest commodity value (bad money) as the creditor must accept such money at face value.

Thiers' Law refers to a situation where the bad money becomes virtually worthless and practically useless (i.e. ceases to be money), which is obviously not the case with Bitcoin vs. Bitcoin derivatives (the law fully applicable) vs. Dollar (partly applicable). So we still have room for Gresham's Law (or its extension) in the case discussed...