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Gold was currency for thousands of years, and its value was not assigned by any state.

jdlshore 4y ago
Are you sure about that statement? I’m not a historian, so I could be wrong, but my understanding is that currencies came very early, raw bullion wasn’t really used for normal trade, and silver was much more predominant than gold.
- scottiebarnes 4y ago
  Trade starts with bartering commodities and collectables. Metals start being used in trade. Gold, having superior stock to flow ratio, becomes the premier store of value. People hoard gold when they can, and get rid of the coins of lesser value. This is how you end up with the US government installing a military base over a huge stash of gold, called Fort Knox. They don't do the same for silver and copper.
- hgomersall 4y ago
  Right, written documentary evidence since Roman times shows that currency was measured by count not weight. There was a brief aside in medieval continental Europe when some influential policy makers misinterpreted Roman documents, but by that point the currency was well established. The value of the constituent metal is dictated by the price (in count) that the mint pays. Nobody pays less because you could go to the mint, and if anybody demands more, you just melt the coin. It was the count that gave value to the metal, not the other way round. The only evidence for currency from barter comes from the imagination of economists of a particular bent.
pessimizer 4y ago
I'd bet that plenty of states insisted that the money they demanded be paid in gold or other precious metals (all of which are useful in other ways.) Other governments may have demanded rice or grain. The government doesn't want your goats. If you're giving up your goats for taxes, it's probably to a tax farmer who you have been granted to as a concession, and that tax farmer pays for the right to tax you in goats in gold (or rice, or grain.) When talking about money with no use, such as USD or bitcoin, however, they've got nothing to hold them up but the demands of the government that issued them to be paid in them. The US dollar is just an IOU from the government that gets cancelled if you owe the US government anything other than prison time. Bitcoin is an IOU from no one, and the only way to spend it is to find a sucker who wants bitcoin.
- scottiebarnes 4y ago
  Good money is hard money, and hard money stores value well because it is difficult to rapidly debase. That's the purpose of money; to store value so that we can transmit that value in the future. What holds up gold or bitcoin is firstly the trust of the society that adopts it, and secondly the inability for any party to rapidly debase it.

Are you sure about that statement? I’m not a historian, so I could be wrong, but my understanding is that currencies came very early, raw bullion wasn’t really used for normal trade, and silver was much more predominant than gold.

scottiebarnes 4y ago
Trade starts with bartering commodities and collectables. Metals start being used in trade. Gold, having superior stock to flow ratio, becomes the premier store of value. People hoard gold when they can, and get rid of the coins of lesser value. This is how you end up with the US government installing a military base over a huge stash of gold, called Fort Knox. They don't do the same for silver and copper.
hgomersall 4y ago
Right, written documentary evidence since Roman times shows that currency was measured by count not weight. There was a brief aside in medieval continental Europe when some influential policy makers misinterpreted Roman documents, but by that point the currency was well established. The value of the constituent metal is dictated by the price (in count) that the mint pays. Nobody pays less because you could go to the mint, and if anybody demands more, you just melt the coin. It was the count that gave value to the metal, not the other way round. The only evidence for currency from barter comes from the imagination of economists of a particular bent.

pessimizer 4y ago

I'd bet that plenty of states insisted that the money they demanded be paid in gold or other precious metals (all of which are useful in other ways.) Other governments may have demanded rice or grain. The government doesn't want your goats. If you're giving up your goats for taxes, it's probably to a tax farmer who you have been granted to as a concession, and that tax farmer pays for the right to tax you in goats in gold (or rice, or grain.) When talking about money with no use, such as USD or bitcoin, however, they've got nothing to hold them up but the demands of the government that issued them to be paid in them. The US dollar is just an IOU from the government that gets cancelled if you owe the US government anything other than prison time. Bitcoin is an IOU from no one, and the only way to spend it is to find a sucker who wants bitcoin.

scottiebarnes 4y ago
Good money is hard money, and hard money stores value well because it is difficult to rapidly debase. That's the purpose of money; to store value so that we can transmit that value in the future. What holds up gold or bitcoin is firstly the trust of the society that adopts it, and secondly the inability for any party to rapidly debase it.