He showed that when old, worn coins were in circulation and the mint began putting out full-weight coins, the old lighter ones remained as money, while the new ones, being heavier, were picked out by jewelers and by those needing to send money abroad.
Gresham's law has a paradoxical wording and is frequently misunderstood.

"Bad" money means not counterfeit money, but merely money that has not as great a bullion value compared with its money value as some other kind of money then in circulation.

But not every piece of such money will drive out every piece of good money.

The law applies only under certain conditions, and within certain limitations.
The "good" will be driven out only if the total amount of money in circulation is in excess of what would be needed if all were of full weight and of best quality.

Paradoxically speaking, if there is not too much of the bad money, it is just as good as the good money.