Edit: Bit coin is an interesting experement with the idea that simply because something is finite it has value based around the idea that at some point people might want it. Even the most simplistic analysis suggests the market will quickly become prone to bubbles but what's intresting is how it will recover after a major crash.
PS: I don't know why people ignore the link between Taxes and Money but try paying your taxes in gold bullion and see how far you get.
Yes, commodity money. A commodity has intrinsic value; so if you use commodities as money (medium of exchange, store of value...), you have money with intrinsic worth.
Supposedly it's the original money, since it arises spontaneously in a barter system. Suppose you have a matching problem in a barter system (I want X from A, and A wants Y, but I only have Z...) The way to solve it is with a series of intermediate barters which cancel out, whose only purpose is to coordinate exchanges (I first give Z to B in exchange for Y, which I then trade for X with A). Some commodities are better at being intermediates than others: they have to be persistent, subdividable, popular (so it's easy to find counterparties who want it). So you have several commodities which end up universally used as exchange.
The problem with commodity money is without other supporting infrastructure you have no way to denominate commitments of future obligations (at least at a macroeconomic level). You can introduce contracts with respect to commodities that can be traded (eg: a contract for 100 pork bellies to be delivered in 1 year) but then you still get into modern finance.
That looks more like a feature of private/competing currencies than commodity currencies. If a commodity money is backed by a state, it shouldn't act differently from fiat money (assuming its price is stable enough to act as a useful "unit of account", which for a weighted basket of commodities shouldn't be difficult. If the commodity basket is the particular one specified by the CPI, then its real value will be a constant by definition!) You wouldn't trade in pork bellies, but convenient "dollars" with a well-understood and stable value, pegged to a fixed ratio of a commodity (X pork bellies). E.g. historically, 1 USD was defined as 1.505 grams gold (1900-1933). And most transactions wouldn't involve physical delivery of a commodity, just paper bills.
You have a good point that if there are multiple currencies (say they are privatized), then there could be major confusion as to how to denominate debts, which currencies are acceptable payment, people being confused by different units and fluctuating exchange rates, etc. Like dealing with international currencies, except everywhere.
You don't need fancy academics to see why the gold standard was a bad idea.
You need money to function as a proxy for the economy. Every time grows up and enters the workforce, you need to add money to the economy to be able to serve as a proxy for his or her labor. As population and economic activity grows exponentially, you need to add exponentially increasing amounts of money to the economy just to avoid deflation.
Now, explain to me how we could've sustainably kept mining exponentially increasing amounts of gold out of the ground?
Can you name an industry in which the much-feared deflation has occurred in the last fifty years? How has that industry done in terms of wealth creation?
Why do you think that the economy isn't capable of adding money if necessary? Are there any historical examples of the opposite occurring?
Why do you think that exponential growth makes sense in a finite world?
Keep an open mind: the banks would prefer that you didn't.
Edit: Bit coin is an interesting experement with the idea that simply because something is finite it has value based around the idea that at some point people might want it. Even the most simplistic analysis suggests the market will quickly become prone to bubbles but what's intresting is how it will recover after a major crash.
PS: I don't know why people ignore the link between Taxes and Money but try paying your taxes in gold bullion and see how far you get.