Why do we place such high value to things such as gold and diamonds? Wouldn’t it make sense to put that value on things that are more “useful”?
In: Economics
“I will give you all of my gold for all of your iron.”
Yes, gold is useless in most applications. But it doesn’t corrode under natural conditions, it’s easy to recognize, easy to form, and is rare enough that you don’t have to worry too much about extra entering your economy and crashing it. Because there’s unlikely to be extra amounts brought in and unlikely to be used for other purposes than currency, it means you can have a decently regulated economy.
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