Why was gold so important as a currency?
Gold has a long and important history as a currency - a medium of exchange, lubricating the wheels of commerce. Why is that, though? What makes gold - as well as its more common cousin, silver - so important to global commerce? First, it's important to understand that anything can act as currency - everything, from iPods to loaves of bread, has a value that humans assign to it. Various cultures around the world have used gold, silver, salt, shells, gems, beads and even pieces of printed paper to represent money. Gold's benefits are partly a result of its physical properties. It's relatively rare, though not as rare. It doesn't corrode in the slightest - imagine the frustration of having iron coins, which rust away over time - and it's malleable, easily shaped into coins, bars, and ingots. It's also useless, which may sound strange at first glance. Gold has a few applications in decoration and jewelry - but no one was going to use it to make homes, weapons or food. Because it's relatively useless, its perfect as a medium of exchange. If a nation used something like iron, grain or salt as currency, the very fact that it can be used up and destroyed makes it a bad currency. A satiric article from The Onion once proclaimed that "U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion." This is actually an axiom of economic thought - all currency and all goods have value because of our shared illusions. Gold, however, has also got thousands of years of tradition backing it up - and, barring some breakthroughs in the field of alchemy, no one is going to be printing it any time soon.
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