What is gold and why is it so valuable?

From ancient civilization, from the Egyptians to the Incas, gold has occupied a special place of real and symbolic value for humanity. In addition, gold has been used as a bargaining chip, as a store of value and as valuable jewelry and other artifacts. Silver tarnishes: it reacts with small amounts of sulfur in the air. That's why we place a special value on gold.

Gold is much more valuable than any other metal, which means it will always have a use for it. Metal is so popular because it doesn't rust or tarnish and its color never fades. That's why gold is likely to remain valuable, no matter what happens in the market. However, as history has shown, gold is a viable medium but not ideal for an economy.

It's tough and rare enough to be used as a marker of value, but there's only a limited amount of gold that humanity can practically access on Earth. Things will run high while your economy is small, but eventually you'll mine all the gold. After that, you can't make more money to meet demand, deflation occurs (prices fall), the economy stops, and then there are riots. And that pile of gold is only growing by a few thousand metric tons a year, or 2% of the current global gold stock.

During the gold standard era, anyone could go to a bank and exchange paper money for a certain amount of gold. As gold became more entrenched in world currencies, many countries began to back their money with the amount of gold their country could produce. Gold is a valuable asset, many investors believe in investing in gold because it has universal value around the world. In the 17th century, many English citizens had homemade mints on which they marked their gold coins with the percentage of pure gold found in them.

The gold standard gave people the assurance that the value of their money did not depend on their country's ability to pay debts, their international position or a thousand other things they didn't understand, but only on their ability to produce gold. So what exactly made gold so valuable and expensive, and why did several peoples show such interest in converting it into currencies? Surprisingly, it's not so much about the properties of gold, but about those that other elements don't have. One of the most striking things about gold is how incredibly difficult it is to get it (and keep it once you have it) and the different things you must master to get gold. Pure gold is highly resistant to aging and tarnishing, so most of the gold from the hominid era still survives today and lives on in your smartphones, computer chips and watches.

If you put together all the earrings, all the golden rulers, the small traces of gold on each computer chip, each pre-Columbian statuette, each wedding ring and cast it, it is estimated that you would only have a 20-meter cube left or something like that. To get gold you have to be good at war Be able to gather a large human workforce to extract it Mastery of global supply and logistics routes Being able to command the guards who will watch your gold and not steal it from you Have the technical knowledge to get gold out of the ground, which is expensive and cumbersome. Gold doesn't rust, tarnish and doesn't tarnish because gold doesn't react with almost anything. You have explained the importance of gold in a simple and direct way.

It is true that gold is the best guarantee and is the best platform for investing your money. In the 16th century, the discovery of South America and its vast gold deposits caused a huge fall in the value of gold and, therefore, an enormous increase in the price of everything else.