[shash]

That's because it's actually quite sane; relying on commodity backed currencies - especially those which are _finite_ leads to deflation. You see that with BTC, where the value keeps rising and you need more and more fractional denominations to make sense. With gold (and historically, more so silver), it was _very rarely_ used for actual trade because it ended up being like five gold coins == someone's entire life savings. It was always silver, copper and unit of account.

Debased currency - a problem every large state eventually faced - is a consequence of deflation.

[int_19h]

A bit more detail on the subject of historical coinage and the place of gold in it:

https://acoup.blog/2025/01/03/collections-coinage-and-the-ty...

[shash]

I was literally thinking of this article!

[TeaBrain]

>Debased currency - a problem every large state eventually faced - is a consequence of deflation

Inflation in the monetary supply, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.

Edit: I'd remembered wrong. It was silver, not gold, that Spain experienced an influx of.

[lmm]

> Inflation, not deflation, leads to the debasement of a currency. An example is how the influx of gold from the conquistadors into 16th century Spain led to inflation, due to the increased supply of this means of exchange resulting in the debasement in value of a given unit of this means of exchange.

No, that's not debasement - in fact it was the opposite, the huge supply of silver (not so much gold) meant those Spanish coins were good-quality bullion. Inflation happened, and while that can commonly be caused by debasement, that wasn't the cause in this instance.

[Aloisius]

Em. Spain, famously, didn't debase its currency.

The gold escudo was 22-karat for basically it's entire existence,.

[TeaBrain]

I was more thinking in terms of the modern conception of currency debasement resulting from the increase in the monetary supply, though I think I must have just been thinking of the real, not the escudo. Several years ago, I read a couple of books on the conquistadors, where the details of the devaluation of silver was discussed, but it's been a while since the information was fresh in my mind.

[jpcom]

Interesting take. Therefore they needed a bridge between the deflationary BTC and a low-inflationary day-to-day note. Is there an obvious fix, my liege?