The Problems With Gold

Gold was accepted as a currency because it was cost-dense, very chemically stable and easy to work with. Gold became the intermediary for trade and no longer would people have to rely on barter or other less than ideal currencies. By building up a good reputation, Goldsmiths could cast gold coins with guaranteed purity and weight. This goes to show that even from its humble beginnings in the workshop of tradesmen, banking was all about the trust that people had in the institution.