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> People used to pay each other in gold and silver. Difficult to transport. Difficult to divide. It would be interesting to hear some of the history behind why

• jcranmer 9y ago
  Gold really wasn't used for currency outside of the main area known to ancient Western civilization. China did use silver for bullion, but mostly avoided it in the everyday coinage, which would be made out of metals like iron, copper, or bronze. Other civilizations chose a variety of things for coinage--Aztecs, for example, used cacao beans and bolts of cloth. So why did gold and silver become the major standard in the Western world? Well, gold and silver are fairly unreactive--you're not going to lose coinage by leaving them it in open air to spoil. Gold is also remarkably malleable, and both metals are fairly easy to work with in terms of metallurgy. The final notable feature is that gold and silver are actually relatively rare in the Mediterranean and Northern Europe. By contrast, where they were quite common--the Americas in particular--they were purely used for decoration and ornamentation, never for currency. Thus the Spanish conquest of the New World was promulgated because they found cultures who were literally covering their walls in money, and Spain was desperately short of cash for their commitments in the Wars of Religion in the 16th century.