Why Gold Is the Ideal Metal for Currency

Of all of the elements on the periodic table, why did gold become the standard of economic value for so much of human history? NPR asked Sanat Kumar, a professor of chemical engineering at Columbia University. He explained that, ideally, the material used in currency should not be reactive, corrosive, radioactive, too common, or too rare. It also needed to have a low melting point so that it could be shaped into coins. Gold is the element that best matches these criteria:

So we ask Sanat: If we could run the clock back and start history again, could things go a different way, or would gold emerge again as the element of choice?

"For the earth, with every parameter we have, gold is the sweet spot," he says. "It would come out no other way."

http://www.npr.org/blogs/money/2010/11/18/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium?sc=fb&cc=fp via Gizmodo | Photo by Flickr user Shiny Things used under Creative Commons license

Newest 5
Newest 5 Comments

I say that the Spartans had it right: IRON's the ideal currency.

It bulky; it's heavy; it's low-cost. No one will want to keep ingots around so they'll circulate big-time, which will perma-stimulate the economy.

Plus, if we make virtual currency (electronic, paper) illegal, no one will want to accumulate wealth, which will eliminate greed and its ills.

Back to basics!
Abusive comment hidden. (Show it anyway.)
Kind of a weird article. He mentions that silver doesn't meet all his criteria, but doesn't mention the fact that it's been used as money far more than gold throughout history. There's also no mention of alloys, but the earliest money was electrum, and bronze has been by far the most common metal for most of the history of coinage, while various forms of brass have been used fairly commonly as well. Even silver coins have often been a copper-silver alloy, since they wear better.

Probably an overview of what metals have actually been used for currency would have been a good start, as this would show that gold use is actually fairly uncommon. Gold is actually really impractical. I'd imagine that this is because it's too soft, so gold coins wear very badly if they are actually used in trade and thus erode value with use. Harder metals work much better.
Abusive comment hidden. (Show it anyway.)
Login to comment.

Email This Post to a Friend
"Why Gold Is the Ideal Metal for Currency"

Separate multiple emails with a comma. Limit 5.


Success! Your email has been sent!

close window

This website uses cookies.

This website uses cookies to improve user experience. By using this website you consent to all cookies in accordance with our Privacy Policy.

I agree
Learn More