The Bitcoin Standard

Chapter 3Monetary Metals

As human technical capacity for the production of goods became more sophisticated, and our utilization of metals and commodities grew, many metals started getting produced at large enough quantities and were in large enough demand to make them highly salable and suited for being used as monetary media. These metals' density and relatively high value made moving them around easy, easier than salt or cattle, making them highly salable across space. The production of metals was initially not easy, making it hard to increase their supply quickly and giving them good salability across time.

Due to their durability and physical properties, as well as their relative abundance in earth, some metals were more valuable than others. Iron and copper, because of their relatively high abundance and their susceptibility to corrosion, could be produced in increasing quantities. Existing stockpiles would be dwarfed by new production, destroying the value in them. These metals developed a relatively low market value and would be used for smaller transactions. Rarer metals such as silver and gold, on the other hand, were more durable and less likely to corrode or ruin, making them more salable across time and useful as a store of value into the future. Gold's virtual indestructibility, in particular, allowed humans to store value across generations, thus allowing us to develop a longer time horizon orientation.

Initially, metals were bought and sold in terms of their ...