Have you ever thought about why a person sees the gold precious?
What is important in a mineral that you cannot eat or drink.\ It is too soft, so you cannot make weapons or tools through it. But its color is beautiful and you can make decorations and jewelry through it, but does this alone make it expensive and makes it popular among all members of societies? If I asked the Muslim Arab do you want gold he will say: Yes
And if you asked the European Christian, do you want to go: he will say of course ...
Well, it seems that the idea about the acceptability of gold has become clear. People, despite their differences and ethnicity, believe in the unique value of gold, but why?
Humans They had no idea of money and their economic system was mainly based on exchange and barter. You give your neighbor a piece of meat in exchange for him to go and collect some firewood for you in order to start the fire, but this system was not the best, but he was able to satisfy the people their needs at that time.
Favor and exchange system is effective in small communities, but when the number of people increases and small villages turn into big cities, it becomes difficult and complicated to work with this system through people.You may offer a service to your cousin or neighbor and know that they will return it one day.But strangers cannot do this with them because there are no guarantees and you are not sure that they will return your favor one day. This is a problem with the old exchange system.
There is another problem as well.
Knowing the exchange rate of different goods:
Like: You are making knives (the best in the city). Someone came and admired your work and wanted you to give him a knife. Of course, you will not give it for free so you asked him: Do you have something to give in exchange for the knife?
He said to you, yes, I have a basket of dates
Question: How many knives would you give in exchange for a date basket? One, two. Okay.
If a second person came to you and offered you clothes, then how many knives are worth these clothes ... well the exchange system would have forced you to memorize all exchange rates for different goods and this is a complicated thing.
We must find a better way to make the trade exchange easier and more efficient. Here the great invention was the "currency". The currency was found in many times in history and is believed to appear naturally in societies that are subject to continuous growth. The idea of money is something that represents a certain value to facilitate trade exchange so instead of Reserve an exchange rate for every commodity in the market, which will make it easier for us to know their prices, and then the new inventing work multiplied (gold, silver, and coins), but what is the measure that makes the currency better and more acceptable than the other .. There are several conditions:
1-Ease of carrying / the currency should be easy to carry, transport, and storage for example / you cannot use knives as a currency and move them from one place to another because you will be injured so you always see that successful currencies are small in size and can be stacked in some way .. So: gold meets these conditions because you can use it as you want Smelt it, pierce it and pass a thread through it, and put it in a bag.
2- Acceptable / The community dealing in the currency must have acceptance of this currency.In order to succeed you must be desirable gold color distinct in nature It is difficult to find any rock of the same color as its shape is remarkable.
3- Resistance / many minerals, the two previous conditions, such as iron and copper, but they have a fatal flaw, "rust." Look around you, you will find many iron and copper equipment on them over time and neglect. The chemical nature of gold makes it resistant. Gold will remain intact.
4- Limitedness / currency must be made from something limited in nature in order to preserve its nature previously. It was possible to use the shells as a coin because not everyone lives near the sea, but everyone went to the sea and prohibited this coin and this is what reduced its value (the more the thing, the less its value) gold Rare in the ground and extracting it is very difficult and the difficulty in obtaining it will ensure that its value will not decrease suddenly.
These are the conditions for using currencies:
There are a number of things that meet these conditions (silver, gold, emerald, sapphire) but why did gold win in the end..the reason: supply and demand.
Many regions in the Middle East, Mediterranean countries, and Europe started using gold as a currency for commercial trading, but the rest of the world did not care about gold. Now imagine that you are a Chinese person and gold has no value in your country, but you know that gold has value in Mesopotamia and you can get what you want there in exchange for a little of this yellow mineral, so you collect this gold and go to Mesopotamia.
Now gold will have a high demand in India and its value will rise. If the demand rises, the price will rise and the same story will be repeated in many places in the world because you have a neighbor that appreciates gold. This makes the gold rise in value to you and this is the main reason for the high price of gold. If we become, we do not use gold directly, but as long as people look at gold at its value.
Gold will remain the precious metal that we know.