Comparing gold to cryptocurrencies, there are indeed many similarities
I always wonder how gold and silver maintain their value. If you look closely, you will see that this metal is not edible. These two metals are shiny so people are attracted and used as jewelry. It's amazing how a beautiful metal adjusts itself to the economy. But there are some logical reasons behind it being expensive.
Scarcity of gold made gold expensive. Scarcity of silver made silver expensive. Since the supply of gold is less than that of silver, the price of gold is higher. If the demand for silver was greater than that of gold. So scarcity plays an important role in making something more valuable. Mining and refining gold costs a lot of money. So the price of gold must be higher than the cost of mining gold. Mining costs contribute to increasing the price of gold. Because of the beauty and cost of gold and silver, it is used to make jewellery. Gold and silver are also used to enhance the beauty of some palaces. Gold and silver are used in technology. Mines of these metals are not very available and with the advancement of technology, the detection and extraction of precious metal mines has increased, but it is not enough to meet the demand of the times. Apart from this, due to many other reasons, the price of gold is increasing and keeping pace with the economy.
Purchasing goods with goods
We are now using crypto currency as a medium of financial transactions. Similarly, in ancient times when people were trading goods for goods, they noticed some disadvantages. Suppose at that time a person would buy 100 kg of paddy, for that he would have to carry 90 kg of wheat. Come to think of it, it was very difficult and inconvenient. So they looked for a medium of exchange that was easy to transport and everyone knew its value. Since gold and silver were rare in all ages, their beauty amazed people and valued them. So they decided to use gold and silver as a medium of exchange. Thus those who needed to buy crops and food could get it only by paying a small weight of silver or gold to the seller. This is how the new era began in ancient times.
Apart from this, there were two classes of rich and poor in the world since ancient times. To become rich you must accumulate wealth. Since food is perishable, food cannot be stored for many years. So there was a need for a medium of exchange like gold and silver which did not rot and could be exchanged for food. Gold and silver do not rust among metals. Other phases like iron, aluminum etc. can cause rust. Therefore, gold and silver were chosen by the people of ancient times and became acceptable to all as successful exchange currencies.
The use of gold and silver as currency started then and people got many benefits. I think the main function of crypto currencies is to get benefits in exchange. Crypto can be used as a very medium of exchange as cryptocurrencies facilitate fast transactions in the current era. It has many more advantages. It can make our life more easier. A cryptocurrency gains popularity and can surpass gold in value if it is in short supply. Bitcoin proves it.
