–“What do you think made gold become money?”- Jeffrey Swann @AgoristView
1) Gold was a valuable commodity like other commodities, but not ‘money’. I didn’t require refinement, but it was too expensive for use as money. So it was just a commodity. Silver required refinement. The first money was electrum. But any metal will do. The honest question is whether gold, ever in history served as money – and the answer is “no”. Gold coins were too expensive, and served as money-like commodities, only liquid in certain conditions, just as they do today, because the value is too high, and liquidity too low.
2) Metal Commodity Money (money proper) has the properties:
a) Scarce, non-perishable, commodity(useful), and a universal signal good(luxury),
b) Consistent weight and volume, unitizable, countable, with a low ratio of weight and volume to value.
c) Trade-markable (warrantable), re-trade-markable (melt, re-stamp), and standard of weight and measure
d) STATES can create a market for a universally desirable commodity by demanding taxes paid in a universal commodity
e) And POLITIES can increase economic velocity (reduce friction) by converting agricultural goods to money.
f) And States can construct, defend, tax, and regulate MARKETS increasing returns.
g) States Can Pay SOLDIERS, and scale the number of soldiers to expand markets.
3) Bitcoin in the Financial Product Hierarchy