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Gold, silver, and platinum

I'm not an expert in the industrial uses of things, but it occurred to me last night that the only industrial use of gold (that I know of) is as a conductor. The rest of its value seems to lie in humans' tendency to fight over shiny objects. Well, that combined with its rarity.

And I got to thinking, are there industrial uses for silver and platinum? Or are these three metals basically expensive decorations, their only worth coming from the "ooh, shiny!" reaction?

Regardless of current uses, it seems to me that the technology of the Mindeodean universe, in the time most of the stories take place (7000 years in the future), there probably won't be any industrial uses for these metals at all, given the technological level of the majority of the planets in that universe.

This in mind, I decided to make gold, silver, and platinum part of the official Mindeodean Empire currency. But with a difference. First of all, all legal tender in the Mindeodean Empire (Mindeodean and Mindeodean colonies, at least) is gold-backed. Even the numbers in the computers that - in our modern economy - are imaginary, even those are backed by one of those three metals. And the official money is in coin form. I don't know what the bulk of the coins will be made of yet, but I've decided there will be a trace amount of gold in each coin. I was thinking, with their technology, that they could put truly microscopic amounts in the coins, in an intricate nanoscale design that is hard to counterfeit. I've also decided that only the Mindeodean government is allowed to be able to put gold, silver, or platinum into the fabrication machines, also to cut down on counterfeiting. And the coins might be made of a variety of materials in intricate patterns. In a world full of fabbers, one has to take steps to make counterfeiting as difficult as possible. If anyone has any other ideas for how to make counterfeiting difficult in that universe, please let me know. Because those fabbers can make basically anything they have the molecular pattern or design of. They're almost like the replicators of Star Trek.

What do you guys think of the idea of banning gold ownership, in that world? If yes, how far should I take it? Should I have them ban all gold, or just gold that isn't in jewelry/timepiece form? Or something else?

Or maybe the whole idea is doomed to failure? Maybe they should have some other economic system? But so far, this system makes the most sense to me.

~ ~ ~

LOL! First post of the new year!

EDIT: christinathena convinced me that the best system of money would be for everyone to make their coins to the same standard. It works because they have sensors that can quickly assess the weight, composition, and purity of the coins. This way, people can fab their own coins! Only official Mindeodean governmental coins (and possibly other government coins) would need to be counterfeit protected. And I think that the first two of the following three ideas I had seem best for those anti-counterfeit protections:

1. Whatever the base metal of the coin, the inside would have a secret design made in another subtance (or more than one).

2. The coins would have a faint radioactive signature, just enough to identify them and be safe even in large numbers. Any ideas on radioactive elements that could fit these standards, and also have a halflife of maybe 500,000 years or so?

3. Some kind of computer chip (or its future equivalent) embedded in official Mindeodean currency with an official (and possibly encrypted) digital seal inside it?

Comments

( 95 comments — Leave a comment )
christinaathena
Jan. 1st, 2010 09:11 am (UTC)
Hell, Gold had pretty much NO practical use before the 20th century and was just as valuable as it is now. I'm pretty sure there're some uses for platinum in industrial applications. In medieval times, silver was used in medicines, but it actually had no beneficial effect and, if used enough, had the side-effect of turning your skin blue. (Blue hands were also a common trait for bankers and merchants)

This in mind, I decided to make gold, silver, and platinum part of the official Mindeodean Empire currency. But with a difference. First of all, all legal tender in the Mindeodean Empire (Mindeodean and Mindeodean colonies, at least) is gold-backed. Even the numbers in the computers that - in our modern economy - are imaginary, even those are backed by one of those three metals. And the official money is in coin form. I don't know what the bulk of the coins will be made of yet, but I've decided there will be a trace amount of gold in each coin.

That's pretty much pre-20th century currency right there.

Historically, copper was used for low-value coins, silver for medium-valued coins (the US originally had silver coins from half-dime to dollar, and a 3-cent for a while, but the 3-cent and half-dime were replaced by copper-nickle alloys) and gold for high value coins (the US had $1, $2½, $3, $5, $10, and $20 gold coins, for example)

I don't know if you'd need to have actual gold in low-value coins, for the same reason that former gold-standard currencies were able to use copper and silver for lower-value coins. They were redeemable (in large enough numbers) for gold coins.

Still, the idea of a tiny amount of gold isn't completely new either. One proposal for the 1 cent coin in the early US was to have a coin that had in its center a tiny disc of silver, worth three-quarters of a cent, surrounded by a larger copper disc worth ¼ cent (an alternate proposal to have a silver-copper alloy with the same amounts, just mixed instead of separate, was rejected because, at such a low percentage of silver, it looked like pure copper to anyone but an expert metallurgist). The French experimented with the same idea, placing a very tiny silver wire in a larger copper coin for low-value coins, but they, too, decided it wasn't practical. But, what was technologically impractical in the 19th century would likely be very practical in a distant-future setting.

I've also decided that only the Mindeodean government is allowed to be able to put gold, silver, or platinum into the fabrication machines, also to cut down on counterfeiting.

Actually, in a gold-based currency, there's no need to control the minting of gold coins, only gold coins with the official government designs! Since the value of a coin is based on the metal, a US coin with $5 worth of gold is no different than a foreign coin with the same amount of gold or a privately-produced coin with the same value. The only difference is that a privately-produced coin would be viewed with less confidence by merchants, since, unless the manufacturer was known and trusted, they couldn't be confident that it contained the same amount of gold as was claimed without testing it. Before the Denver mint was established, for example, there were quite a few privately-minted coins in California from the gold mined there. As long as one didn't copy design of US coins, the government permitted this. There were other private mints, too. The government simply treated them as being equivalent to foreign coins. Not legal tender, but not illegal either. You couldn't be required to accept them in payment of debts, but you could accept them if you wished. And foreign coins circulated much more easily than they do now, due to the fact that, in a gold-standard system, exchange rates are fixed. Each currency is defined as a certain amount of gold, and therefore converting from dollars to pounds is no different than converting from feet to meters.

(Part 1)

Edited at 2010-01-01 09:28 am (UTC)
fayanora
Jan. 1st, 2010 09:43 am (UTC)
That's pretty much pre-20th century currency right there.

With updates. And hey, it makes sense.

Historically, copper was used for low-value coins, silver for medium-valued coins (the US originally had silver coins from half-dime to dollar, and a 3-cent for a while, but the 3-cent and half-dime were replaced by copper-nickle alloys) and gold for high value coins (the US had $1, $2½, $3, $5, $10, and $20 gold coins, for example)

Though Mindeodean has high-temperature (liquid nitrogen temp) superconductors, I can still imagine there being lots of industrial uses for copper, and I'm going into this with a mind towards counterfeiting, which would be far easier in that universe because of the fabbers. Basically, they're like super-advanced 3-D printers that can make anything if they have the right amount of elements in their element canisters. Which would make it super easy to counterfeit money unless some major steps were taken to prevent that. Fabbers aren't just owned by corporations... middle-class folks and even some of the poor have them, as well.
fayanora
Jan. 1st, 2010 09:43 am (UTC)

I don't know if you'd need to have actual gold in low-value coins, for the same reason that former gold-standard currencies were able to use copper and silver for lower-value coins.

The reason for having gold in them, and banning use of gold in fabbers, is because gold has no industrial uses in that future, so it's one of the few elements they can get away with restricting the fabber use of. And so, if there's gold in a coin (like a square nanometer of gold) then you know it's likely NOT counterfeit. The sheer amount of effort needed to hack a fabber to accept gold would (aside from voiding the warranty) mean only really wealthy crooks would be able to counterfeit it.

Still, the idea of a tiny amount of gold isn't completely new either. One proposal for the 1 cent coin in the early US was to have a coin that had in its center a tiny disc of silver, worth three-quarters of a cent, surrounded by a larger copper disc worth ¼ cent (an alternate proposal to have a silver-copper alloy with the same amounts, just mixed instead of separate, was rejected because, at such a low percentage of silver, it looked like pure copper to anyone but an expert metallurgist). The French experimented with the same idea, placing a very tiny silver wire in a larger copper coin for low-value coins, but they, too, decided it wasn't practical. But, what was technologically impractical in the 19th century would likely be very practical in a distant-future setting.

Especially with government-grade fabbers and futuristic sensors.

Actually, in a gold-based currency, there's no need to control the minting of gold coins, only gold coins with the official government designs! Since the value of a coin is based on the metal, a US coin with $5 worth of gold is no different than a foreign coin with the same amount of gold or a privately-produced coin with the same value. The only difference is that a privately-produced coin would be viewed with less confidence by merchants, since, unless the manufacturer was known and trusted, they couldn't be confident that it contained the same amount of gold as was claimed without testing it. Before the Denver mint was established, for example, there were quite a few privately-minted coins in California from the gold mined there. As long as one didn't copy design of US coins, the government permitted this.

Hmm... you know, this actually makes a lot of sense, especially considering how lax Mindeodean is about laws for its member planets (except those who are actually owned/colonized by Mindeodeans). Hmm... they wouldn't even need to ban gold from being used in fabbers. I'll consider this!

In a culture that has the technology to easily test a coin's purity and mass, there'd be no need whatsoever to regulate the production of coins. Presumably all coin manufacturers would follow a standard set of guidelines to weight and denominations to make them more convenient for exchange. It'd be less than convenient if, say, there were some coins worth 20 units and others worth 25 units and some worth 30 units and so forth.

LOL! Hey, if I go with that system, people could fab their own coins! The sensors would tell people the mass and purity of the coins, and that would be enough. Cool! I think I'll change to that system.
(no subject) - christinaathena - Jan. 1st, 2010 09:48 am (UTC) - Expand
(no subject) - fayanora - Jan. 1st, 2010 10:05 am (UTC) - Expand
(no subject) - kengr - Jan. 1st, 2010 10:30 am (UTC) - Expand
(no subject) - christinaathena - Jan. 1st, 2010 11:40 am (UTC) - Expand
(no subject) - christinaathena - Jan. 1st, 2010 11:40 am (UTC) - Expand
christinaathena
Jan. 1st, 2010 09:28 am (UTC)
Part 2
The only necessity was to make sure that coins with the government's design were produced only by the government, because those coins were trusted by citizens to contain exactly what they claimed to contain. If private citizens copied US coins but put only, say, 90 cents worth of silver in a supposed silver dollar, then that would erode trust in all silver dollars, and lower their value, raising prices. The mint law, in fact, prescribed the death penalty for mint officials who used less than the legally required amount of silver in the coins, since confidence in the currency was so crucial to economic wellbeing.

Perhaps each planet could produce its own coins, to the same standards and therefore readily interchangeable.

In a culture that has the technology to easily test a coin's purity and mass, there'd be no need whatsoever to regulate the production of coins. Presumably all coin manufacturers would follow a standard set of guidelines to weight and denominations to make them more convenient for exchange. It'd be less than convenient if, say, there were some coins worth 20 units and others worth 25 units and some worth 30 units and so forth. Or even if they had the same value, but used different purity levels, such that they were different sizes, making users have to actually read the coin's value. If all 25-unit coins are the same size, it's easy to recognize them by sight
fayanora
Jan. 1st, 2010 09:51 am (UTC)
Re: Part 2
Perhaps each planet could produce its own coins, to the same standards and therefore readily interchangeable.

You know, given that Mindeodean lets 99% of its member worlds rule themselves without much interference.

And it would be fairly easy for the government to counterfeit-protect their own coins. Ideas:

1. Whatever the base metal of the coin, the inside could contain intricate patterns done in one or more other elements.

2. Faintly radioactive signature left on official government coins? Just radioactive enough to be detectable by a scanner, not so radioactive as to be dangerous at all.

3. Perhaps a computer chip (or whatever the equivalent is in their technology) embedded in the coins with an encrypted digital official seal in it?
Re: Part 2 - christinaathena - Jan. 1st, 2010 10:05 am (UTC) - Expand
Re: Part 2 - fayanora - Jan. 1st, 2010 10:19 am (UTC) - Expand
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Re: Part 2 - kengr - Jan. 1st, 2010 10:38 am (UTC) - Expand
Re: Part 2 - christinaathena - Jan. 1st, 2010 10:49 am (UTC) - Expand
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christinaathena
Jan. 1st, 2010 09:36 am (UTC)
Incidentally, there is precedent to my "each planet produces its own coins" idea. In the 19th century, much of Europe was joined in what was called the Latin Monetary Union. It consisted of a number of nations whose currencies were all defined by a single standard, and thus, were all equal to each other. Each nation produced coins of the same sizes and denominations as the others, and were all interchangeable. 1 French Franc = 1 Italian Lira = 1 Greek Drachma = 1 Spanish Peseta, etc. There was even talk of redefining the US dollar so as to equal exactly 5 francs (instead of just a little bit over 5 francs), making an easy exchange rate. The British also considered redefining the pound to be exactly 25 francs (at the time it was worth about 24.96 francs) and decimalizing the pound into 1,000 subunits. This fell apart after WWI when the various currencies were taken off the gold standard and began to float independently of each other.

On Galhaf, the Krivashanian Confederation works that way. Each member city-state has its own currency, but they have a fixed 1:1 exchange rate.
christinaathena
Jan. 1st, 2010 09:41 am (UTC)
Furthermore, several British colonies use their own pounds, with a fixed 1:1 exchange rate. Scotland, too, produces its own banknotes, but not coins, equal in value to Bank of England notes.
(no subject) - fayanora - Jan. 1st, 2010 09:56 am (UTC) - Expand
(no subject) - underlankers - Jan. 2nd, 2010 01:28 am (UTC) - Expand
underlankers
Jan. 1st, 2010 04:50 pm (UTC)
There's even a precedent in US history: the various currencies produced by the 13 United States in Congress Assembled.
kengr
Jan. 1st, 2010 10:27 am (UTC)
Gold is not that great a conductor. It gets used in electronics because it doesn't *corrode* or tarnish. That's why a lot of connectors are gold plated. It keeps the contacts from going bad due to corrosion.

Platinum is a valuable catalyst. Catalytic converters for cars use something like $100 of it!

Silver is used in a lot of things. The major use is *still* photographic film.

Please note that you cannot have a currency backed by a precious metal *and* forbid ownership of said metal. Yes, the US sort of did that for 50 years, but it was a case of the US would still redeem the currency in gold for foreign governments and the like.

Backing money with *anything* is doomed to failure. It sets limits on the money supply that mess up the economy.

Money is nothing more than bookkeeping. The physical respresentation of money (coins and bills) don't actually need to have value independent of what is marked on them. And having that independent value has led to problems *many* times in history.

In essence, the value of a "dollar" depends only on the health of the economy and the extent to which the public *believes* the economy is healthy. Anyone who claims anything else doesn't really understand the concept of money.

Having currency with an "inherent value" causes problems when something happens that screws up the economy. Having all that gold (or whatever) doesn't mean a damn thing if there's a famine or if some other important consumable (power, for example) is not in sufficient supply.

Likewise, when (not if) tech reaches a high enough level, the cost of converting iron or silicon or whatever into gold (or whatever) won't be that big a deal.

Basic concept that has to be understood. *NOTHING* has an inherent value. It only has a *relative* value based on the supply and the demand.

There are a number of metals that are pretty pricey because they are hard to extract or even find. But they are not terribly useful except in very specialized uses. And because they are so hard to extract, folks look for substitutes.

Likewise, there are some pretty common things that are valuable because there's a huge demand (water is a good example).





christinaathena
Jan. 1st, 2010 10:52 am (UTC)
Likewise, when (not if) tech reaches a high enough level, the cost of converting iron or silicon or whatever into gold (or whatever) won't be that big a deal.

That would require enormous amounts of energy. And would make the effective cost of gold equal to the cost of the energy used. I doubt you could ever produce energy cheaply enough to make gold cheap.

Or at least, if we ever did reach that level, it would be in a culture so radically different from ours that we couldn't hope to even guess what it would look like. It would be like a stone-age hunter-gatherer trying to imagine the 21st century!
(no subject) - fayanora - Jan. 1st, 2010 10:58 am (UTC) - Expand
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(no subject) - fayanora - Jan. 1st, 2010 11:25 am (UTC) - Expand
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underlankers
Jan. 1st, 2010 04:47 pm (UTC)
Perhaps a material like iridium which is extremely rare but as valuable as Gold might step in to fill the void? Spices, after all, led to the conquest of America. There is no reason for aliens to have coinage or even economics as humans understand them.
fayanora
Jan. 2nd, 2010 01:15 am (UTC)
You're forgetting, though they are different species, the Mindeodeans' ancestors were human.
(no subject) - underlankers - Jan. 2nd, 2010 01:24 am (UTC) - Expand
(no subject) - fayanora - Jan. 2nd, 2010 01:28 am (UTC) - Expand
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fayanora
Jan. 2nd, 2010 01:18 am (UTC)
Iridium looks neat.
(no subject) - underlankers - Jan. 2nd, 2010 01:26 am (UTC) - Expand
consortofvenus
Jan. 2nd, 2010 03:22 am (UTC)
Just a note, on occasion rich members of military would use gold to make armor. I find myself wondering if gold is harder than bronze, iron etc. armor of the time (ancient).
fayanora
Jan. 2nd, 2010 03:38 am (UTC)
I doubt it. Gold is a very soft metal. And very heavy. I doubt it was solid gold. If it was, it was purely for show.
( 95 comments — Leave a comment )

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