Short history of gold as money.

In order to fully understand the purpose of gold, one must look back to the start of the gold market. While gold's history began in 3000 B.C, when the ancient Egyptians started forming jewelry. It took thousands of year until in 560 B.C. gold began to be used as a currency. At that time, merchants sought to create a standard and easily transferable trade medium. This gave birth to the idea that a gold coin stamped with an official seal. this was chosen because of the status gold already had as a widely accepted and recognized substance.

This shift from jewlery to money caused gold's importance to grow especialy in Europe. Great Britain created its own precious metals-based currency in 1066. The British pound was created to symbolize a pound of sterling silver whilst shillings and pence were all based on a specific amount of gold (or silver). Eventually, gold began to be a symbol of wealth across the planet.

The U.S. government continued the use of gold, by establishing a bi-metallic standard in 1792. The bi-metallic standard stated that every monetary unit in the U.S. must be backed by gold or silver. At that time $1 was equivalent to 24.75 grains of gold. that means that the paper money simply represented the gold or silver that was presently held on deposit at the bank.

Sadly the gold standard was not to last. in the 20th century several key events eventually led to the transition from gold in the monetary system. when the Federal Reserve was created it started issuing promissory notes that were redeemable for gold/silver on demand. The Gold Reserve Act of 1934 created the U.S. governments authority to control the gold coins in circulation which put an end to minting new gold coins. This is what led to the idea that gold or gold coins were not necessary in the monetary system. Eventually the U.S. shelved the gold standard in 1971 meaning no more currency would be backed by.

Gold has palyed a huge role in the monetary history of mankind and it still has a place in our valuesystem, just not as money(for now). with the rise of cryptocurrency we have even seen some gold backed crypto's coming onto the market. There has also been talk of going back to the gold standard in africa, but that fell apart after the destruction of Libiya. The gold standard has done from mass use but it is likely that eventually it will gain popularity in some form or another.

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Posted from my blog with SteemPress : https://habarinetwork.com/2018/08/02/short-history-of-gold-as-money/

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