There is a huge difference between a coin and a paper bill. Unlike the paper bill, the gold coin is both a currency and a commodity - It has many useful proper

There is a huge difference between a coin and a paper bill. Unlike the paper bill, the gold coin is both a currency and a commodity - It has many useful properties. It can be melted down and turned into jewellery, used in electronics, tooth fillings, glass-making, paint, etc... Fiat money can be exchanged for other things but fiat money in itself cannot be converted into anything useful. Destroying fiat currency to sell the underlying material is illegal in most countries. When gold coins were currency, people would shave slivers of gold from their coins to pay for small things. This emphasises that the value of the currency was entirely in its material. The value of a gold coin as a currency was equal to its value as a commodity.