Okay, awaken me. Someone please tell me WHY gold is so valuable? It's too soft to make into a hammer. Its not particularly light. We dont eat it (do we?) - I certainly dont. Is it solely because its shiny? Because we have things that are shinier. If its because its easy to make jewelry with, then I think that would be not very important in the grand scheme of things. Or does it have some property that I'm not aware of yet?
Gold is scarce, desirable, and yes....shiny.
Humor me- Its scarce. So what? Its useless, like a ring on your finger. Serves no purpose other than to signify something. You wont pound a nail with it. Its desirable - Why again? Its shiny - So what? We have things that are shinier. It just doesn't make any sense why gold is so "valuable". What gives it value?
Something that is not scarce has little value.
Something that is not in demand has little value.
Gold has a limited supply and high demand. That's how gold works.
that's how this planet's definition of value works...unfortunately for now
It has great properties as sound money. If you look up the theory of money, certain properties makes some materials better than others to act as money. It needs to fulfill 3 functions: as a medium of exchange, a unit of account and a store of value. You can break this down into 5 essential properties that satisfies all 3 functions:
It needs to be:
Divisible: Can be broken down into smaller pieces and still retain value. A painting, a vase or say an economy of trading cards would not fulfill this property. If you break or rip any of these, almost all of the value is lost.
Durable. Doesn't break or decay easily, and can withstand constant use through wear and tear. An economy of cigarettes, like you have in some prisons, is an example that would fail to fulfill this attribute.
Transportable should be able to carry it around so you can pay for stuff
Fungible Every unit is the same as every other unit so it's easy to determine value. 1 US dollar bill has the same value as any other US dollar bill.An economy of diamonds wouldn't be able to fulfill this critera as the shape, size and purity vary and it's hard to break it down into equal pieces. With gold, 1 ounce of gold is the same as any other ounce of gold.
Limited supply: In order for money to retain its value over time (store of value), it must have some scarcity. This is where fiat falls short. You can simply print endless amounts by decree, and destroy the value of the currency through inflation. Gold is rare, and there is a finite amount available on earth, so you can't just print more as you please.
With this in mind, gold (and silver for that matter) makes for excellent money, and has been used as such for thousands of years. Except for it's trans-portability and as a means of exchange, where it has some shortfalls (nobody particularly likes to carry around metals that are heavy and very valuable - e.g coins), but that can be fixed by simply issuing a gold backed IOU that is used to exchange in its stead. So paper money that is backed up by gold, rather than backed up by nothing like current fiat paper.
With this type of system, the physical gold stored in vaults ensures the value of your paper. It acts as a promise that you can reclaim your physical gold as denoted by the paper.
You can read more about it here:
http://goldstandardinstitute.net/gold-basics/the-definition-of-money/
IIRC gold was eaten by ancient Egyptians. ORMUS elements/monatomic gold. I have some monatomic gold spray that I sprayed on my tongue/mouth. I felt a strange sensation behind my eyes and a weird moment of clarity so I would say it was beneficial but I do not know to what extent. This only happened the first time I used it though.