Explain the concept of different currencies and why there is no singular world wide currency/ what are benefits and downsides of having a world wide currency?
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Currency used to be the physical resource. A cow is a cow wherever you are. Gold is gold. As trade advanced, people started switching to coins as they’re more portable than a cow, and then countries started standardizing their coins to make exchanging money for goods easier. They used to actually weigh coins to determine their worth because the coins themselves were silver, gold, or copper. Then they eventually shifted to having something non-valuable (like paper or nickel) stand in for a specific amount of gold, but the amount it represented varies by whoever was producing the coin. Now it doesn’t even directly represent a specific amount of gold, it’s tied to the country’s economy and its value depends a lot on inflation. That’s why there’s an exchange rate, each country’s currency reflects a different value depending on the country’s economy and how expensive goods sell for in that country.
There have been very few times in history where one country wasn’t at war with another. We’d need world peace to settle on a global currency. Even crypto has multiple different kinds and it’s not linked to any specific country. The EU obviously switched to one currency but it wasn’t easy and it almost didn’t happen because of how much poorer Greece was relevant to the other European countries and the concern that their poverty would tank the Euro’s value. It is not currently possible to do that on a larger scale.
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