Greysdale Mead is the code Kvothe uses at Anker's Bar to order water when a grateful patron offers to buy him a drink.
Often ordered under different names (Sounten, Peveret) at bars by musicians or other performers when appreciative patrons offer to buy them a drink, the drink itself is merely water.
The ruse is described by Manet as "an old whore's trick." The performer is working and would rather stay sober. The money spent on the drink is more desirable than the drink itself. Therefore, the performer orders a drink that doesn't exist and the barman serves water. Money for the drink is put aside by the barman, who at the end of the evening splits the profit with the customer who ordered it.
Kvothe and Manet explain this trick to Simmon one night at the Eolian. Sim protests that when he tried Greysdale Mead it didn't taste like water, it tasted like "sweet pickles and piss," so how can it just be a ruse? Kvothe explains that if he orders something that actually exists, it's less suspicious. The staff at Anker's know what he means and always serve Kvothe water.
This alludes to the idea that Greysdale Mead is actually a legitimate mead, albeit a very low quality drink.
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