Eli5 what it means when a currency is said to be backed by gold

Question

I see this all the time, mostly when references are made about the dollar and how it was once backed by gold

In: 164

Answer 1

gold standard means that you are able to trade that money with the issuers for gold. gold has been seen through the ages as most realiable keeper of value, as it does not corrode or dissolve easily, is easily moldable, and it was somewhat hard to produce more of, but still accessible enough to be widely used by society

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Keep in mind that fiat and backed by gold are not true opposites, as you can still have fiat backed by gold. fiat can mean more things, like :

there being a state forcing its usage under the threath of violance

any money not backed by a physical/tangible items or things

unfixed exchange rate of the item backed and money