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The interesting question to me is why people in earlier times valued gold at all (i.e. before understanding its uses in electrical circuits, etc.). Why would pe

The interesting question to me is why people in earlier times valued gold at all (i.e. before understanding its uses in electrical circuits, etc.). Why would people care for it? I mean, OK it doesn't rust, but why's it so special?

JoeSmithson 8y ago
Essentially for the same reason people value Bitcoin today.
sudeepj 8y ago
> it doesn't rust, but why's it so special? "Power resides where men believe it resides" - Varys, Game Of Thrones
wickedsmile 8y ago
You could trade gold for almost anything. So, anyone who had enough gold could afford most of things - without worrying about the reason the gold is valued. Many smart people work for Google and Facebook and a lot of them do not care about negative effect of ad economy on the society because the wages which they pay enables them to afford a house in a good locality and good enough lifestyle and probably interesting work. Most people don't look at things from fundamental level.
roenxi 8y ago
Well, the key property is it doesn't rust :P. 2nd key property is that it is hard to come by. Gold has a big advantage over, say, (picking a random substance that is expensive by weight) printer ink because with printer ink if you don't store it properly it is likely to lose its value. Gold storage can be delegated to any idiot (such as a central bank official, heh heh) and as long as they do not lose it everything will be fine. Doesn't burn, doesn't rust, doesn't dissolve in water. Anything as difficult to extract as gold is worth about as much (gold isn't especially profitable to mine). Gold just happens to be about as indestructible as anything we know of and have a very convenient value/volume ratio to procure. It is also a pleasing shade of yellow, which counts for something. If we are trading without me having something you need right now then I need a way to show you that I'm not some layabout asking you to do stuff for free. Gold is a guarantee that if we unwound the chain of trades at some point someone did something real. That sounds really silly, but it turns out that some axiom like that is needed for trading to make sense.
antidesitter 8y ago
According to [1] which references [2]: An element must meet four qualities to stand alone as a premium currency... First, it can't be a gas — gases simply are not practical for currency exchange... Second, it can't be corrosive or reactive... Third, it can't be radioactive. [Fourth, it] must be rare enough to be valuable, but not so rare that it's impossible to find. That brings us to five elements: rhodium, palladium, platinum, silver and gold. Although silver has been used for currency, it tarnishes easily, so it's out. Rhodium and palladium were discovered only in the 1800s, so they'd have been of no use to early civilizations. That leaves gold and platinum. Platinum, however, has a melting point around 3,000 degrees Fahrenheit (about 1,600 degrees Celsius), which could only be attained in a modern furnace, so early civilizations would not have been able to conveniently shape it into uniform units. [1] https://www.livescience.com/32863-gold-best-element-money.html https://www.livescience.com/32863-gold-best-element-money.ht... [2] https://www.npr.org/sections/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium https://www.npr.org/sections/money/2011/02/15/131430755/a-ch...

JoeSmithson 8y ago

Essentially for the same reason people value Bitcoin today.

sudeepj 8y ago

> it doesn't rust, but why's it so special? "Power resides where men believe it resides" - Varys, Game Of Thrones

wickedsmile 8y ago

You could trade gold for almost anything. So, anyone who had enough gold could afford most of things - without worrying about the reason the gold is valued. Many smart people work for Google and Facebook and a lot of them do not care about negative effect of ad economy on the society because the wages which they pay enables them to afford a house in a good locality and good enough lifestyle and probably interesting work. Most people don't look at things from fundamental level.

roenxi 8y ago

Well, the key property is it doesn't rust :P. 2nd key property is that it is hard to come by. Gold has a big advantage over, say, (picking a random substance that is expensive by weight) printer ink because with printer ink if you don't store it properly it is likely to lose its value. Gold storage can be delegated to any idiot (such as a central bank official, heh heh) and as long as they do not lose it everything will be fine. Doesn't burn, doesn't rust, doesn't dissolve in water. Anything as difficult to extract as gold is worth about as much (gold isn't especially profitable to mine). Gold just happens to be about as indestructible as anything we know of and have a very convenient value/volume ratio to procure. It is also a pleasing shade of yellow, which counts for something. If we are trading without me having something you need right now then I need a way to show you that I'm not some layabout asking you to do stuff for free. Gold is a guarantee that if we unwound the chain of trades at some point someone did something real. That sounds really silly, but it turns out that some axiom like that is needed for trading to make sense.

antidesitter 8y ago

According to [1] which references [2]: An element must meet four qualities to stand alone as a premium currency... First, it can't be a gas — gases simply are not practical for currency exchange... Second, it can't be corrosive or reactive... Third, it can't be radioactive. [Fourth, it] must be rare enough to be valuable, but not so rare that it's impossible to find. That brings us to five elements: rhodium, palladium, platinum, silver and gold. Although silver has been used for currency, it tarnishes easily, so it's out. Rhodium and palladium were discovered only in the 1800s, so they'd have been of no use to early civilizations. That leaves gold and platinum. Platinum, however, has a melting point around 3,000 degrees Fahrenheit (about 1,600 degrees Celsius), which could only be attained in a modern furnace, so early civilizations would not have been able to conveniently shape it into uniform units. [1] https://www.livescience.com/32863-gold-best-element-money.html https://www.livescience.com/32863-gold-best-element-money.ht... [2] https://www.npr.org/sections/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium https://www.npr.org/sections/money/2011/02/15/131430755/a-ch...