Friday, March 20, 2009

E-currency:

Firstly let's define what is a CURRENCY. A currency is a unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange, a store of value. Therefore any currency or gold (for millennia gold has been used as money, a store of value) are a form of money.
However gold is a better money than a currency because it better keeps its purchase power with time. In fact if 50 years ago you could completely dress yourself with 100 grams of gold then today you still dress yourself with 100 grams of gold which is not the case with any currency. Effectively if 50 years ago you could dress yourself with 50$ today it is not enough because on inflation, so gold is a better money.
Qty Unit of account Currency
560 US dollar American
1 troy ounce gold
Despite the fact that by definition gold is more a money than a currency, we can however say that gold is similar to a currency. That is why many people use the term "gold currency" to talk about gold as a medium of exchange. So the gold currency is similarly to a national currency (USD, EURO, CAD, etc.) because both are units of account. As a bank account contains a quantity of a national currency (1000 USD or 1000 EURO, etc.) a gold account contains a quantity of a weight of gold (10 troy ounces or 100 grams).

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