People have traded gold for a really long time. With accurate measuring devices and the internet for variable prices, why do people use individual nations currencies and crypto which are often unstable?
In: Economics
Why does gold have value? Because we believe it has value. We all accept the shared belief (or delusion) that gold is precious and valuable. Otherwise, it’s no different than quartz or pyrite; a pretty rock.
If you’re pinning the value of a substance on a shared acceptance, then any currency is just as valid, so long as everyone believes it has value. If we accept the same shared belief (or delusion) that paper with the proper markings is valuable, then it has value.
Paper money has the convenience of being much more portable, controllable, and adjustable. The only variable for gold as a currency is the physical amount/mass; purity is just a stand-in for equivalent-mass of pure gold. Money can vary in amount and denomination. One bill can be worth hundreds or thousands of another bill, meaning you can represent far larger sums in a practical form. I can have ten bills in my hand that represent a meal ($10) or the downpayment for a cheap car ($1000), with the only difference being the patterns printed on it. Trying to handle weights of gold to match that variability of value will be much more frustrating.
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