Is digital currency valid? What is the backing of digital currency?
Semi-civilized man first exchanged goods for goods. After a while, some goods became more valuable and practically opened their place as money. Among these goods were the bull in ancient Greece, the elephant in Sri Lanka, and the human skull in Brunei. With the development of human civilization, societies began to use metals and ornaments such as gold and silver instead of goods, and for the first time in Mesopotamia, gold coins were minted. It took many years for humans to turn from coins to banknotes. Due to the scarcity of gold and metals, the Chinese invented something similar to banknotes in the mid-tenth century AD and named it Chao, which was considered worthless in other parts of the world. The practical and integrated use of paper money throughout China dates back to the Yuan Dynasty, and is the world's first paper money. But the first banknote today was printed on January 5, 1691 at the Bank of Stockholm and is now in the bank's museum.
It seems that the circulation of paper money began in the new centuries of the French Revolution. On November 2, 1789, the French National Assembly, by law, declared all church property and lands national and ceded them to the government of that country. The government issued paper money as collateral for the lands and properties.
The gold standard is a monetary system in which the economic calculation unit of the standard is the fixed weight of gold. Under the gold standard, the currency is either a coin calculated on the basis of a certain amount of gold, or the issuer repays it in the form of a banknote (securities) in gold, and normally on the basis of a predetermined fixed amount. Guarantees. Standard gold currencies can be domestic, which means that the holders of these securities can receive the money in return, or only internationally, in which case only a small number of (legal) entities, such as central banks, They have the right to request that it be turned into gold. Currencies that return fixed amounts of gold in exchange have a fixed exchange rate. The goals of the gold standard are to prevent the monetary resource from expanding, so that its fixed value can be measured against other prices (rates), and to allow wider monetary circulation, including barter, and with a higher degree of trust between the two. Established the quantitative and qualitative stability of money. Gold standards of various types are used in both national and international forms, and gold standard currencies are often used as a monetary unit against lower fixed value units that have been measured. Standard gold coins in the past included the Venetian Ducat and the British Pound Sterling in the late 19th century. Gold was the basis of the Bretton Woods System, which became obsolete in 1971-1972.
In the modern mainstream thinking, the gold standard is undesirable because it relates to the collapse of the global economy in the late 1920s, and it piles up supply and demand, which are much better tools for regulating interest rates, money supply, and the monetary base. However, there are several other theories for the turbulent economic situation that exist at this time. Although the gold standard is not currently used, it has supporters because it revives and shapes part of the basic theory of monetary policy as a benchmark for comparing other monetary systems. Proponents of one of the many gold standards argue that gold is the only international measure of value, and that gold standards prevent inflation by providing an unlimited supply of money in the form of unsupported money and provide the most appropriate theoretical basis for Provides a monetary system.
Due to its rarity, durability, and ease of recognition through its unique color, weight, flexibility, and acoustic properties, gold is a commodity that merchants and traders have chosen as a common unit of account - hence it has long been used as a form. Money and wealth storage have been used. The exact nature of the evolution of money varies mainly in time and space, but historians believe that the high value of gold because of its beauty, density, corrosion resistance, integrity, and easy divisibility, also serves as a store of value. (Quote) and as a unit of calculation for the value accumulated by other types of units - useful; In Babylon, a scoop of wheat mixed with gold was used as a sample to convey the desired value. Early grain-based monetary systems used gold to determine the value of savings. Banking began when the savings in the bank could be transferred through a giro remittance system, or interest-bearing lending from one account to another.
When used as part of a profitable monetary system, the performance of paper money (banknotes) reduces the risk of gold exchange and the likelihood of devaluation of coins, and prevents the reduction of currents (it) in relation to such accumulation and losses. . The initial development of paper money (banknotes) was mainly due to uncertainty about transportation and the dangers of long-distance travel, as well as the desire of governments to control or monitor the flow of trade within their territory. Coin-backed money is called representative money, and issued securities are often referred to as certificates to be used to extract other forms of paper money (banknotes).
But, over a long period of human history, silver has been the main medium of circulation (financial) and the main metal (supply) of money. Gold was used as the ultimate value (financial) reserve, as well as a means of payment when its portability, especially for payment to an army, was of great value. Gold replaced silver as a major unit in international trade at various times, including in the Islamic Golden Age, the peak of trade in Italy during the Renaissance, and most importantly during the nineteenth century. Gold remained the calculating metal of money holding until the breach of the Bretton Woods Agreement in 1971, and remained an important barrier to the activities of central banks and governments, a means of maintaining public liquidity, and a (financial) reserve.
The first metal to be used as a common currency more than 4,000 years ago was silver, when silver ingots were used in commerce. Gold coins were first used in 600 BC. But long before that, gold, like silver, was used as a source of wealth and a basis for trade in the Akkadian region, and then in Egypt. Until the twentieth century, silver was used as the most common monetary metal in ordinary transactions. The metal was still in circulation in certain bimetallic coins, such as the 20-peso coin of Mexico around 2005.
The Persian Empire collected taxes based on gold, and when the territory was conquered by Alexander the Great, it was used as a basis for minting gold coins in the Macedonian Empire by Alexander.
Paying gold to mercenaries and soldiers reinforced its importance: As Niccolo Machiavelli mentioned in his work 2000 years ago, gold was synonymous with paying (salaries) for military operations. The two most important gold coins minted in the Roman Empire were the aureus, which weighed approximately 8 grams of gold and silver, and the smaller Solidus coin, which weighed 4.4 grams and was 2.4 grams of gold. Roman mints were interestingly active, minting and minting millions of coins during their republic and empire.
After the collapse of the Western Roman Empire and the emptying of the gold mine (s) in Europe, the Byzantine Empire minted alternative coins for the coin (Solidus) under the name nomisma or bezant. These coins were of the same weight and purity as their counterparts in the Western Empire and were still considered Solido coins. Unfortunately, gradually, the Byzantine Empire reduced the purity of these coins to the 1030s, and by the 11th century, only 15% of the weight of the coins in circulation was gold. This marked a sharp drop in real value from 95% on former coins to 98% on Roman gold coins.
Since the late seventeenth century, trade has been increasingly conducted in dinars. The dinar was a gold coin minted in the form of the original Solidus Remy, and was similar in size and weight to the Byzantine Solidus but produced by the Arab Empire. The Byzantine solidus and the Arabic dinar coexisted together about 350 years before the solidus began to decline.
Dinars and dirhams were gold and silver coins, respectively, minted primarily by the Iranians. The caliphs of the Islamic world approved these coins, but it was during the reign of Caliph Abdul Malik (Ibn Marwan) (685-705) that he made reforms in this common currency from which the history of the dinar is thought to have begun. He took the images from the coins and placed its standard sources on the coin, the word of God, and proved the ratio of gold and silver in these coins. The rise of Islamic power and trade led to the dinar becoming the dominant currency from the west coast of Africa to northern India until the late 1200s, and continued to be the dominant coin for hundreds of years thereafter. Similarly, with the size, purity, and weight of the Solidus coin, it was called the Dinaric, Byzantine, or Solidus itself. This coin remained a desirable unit for calculation for more than 1,300 years and even longer than the three world empires.
In 1284, the Republic of Venice struck the first pure gold coin, the Ducat, which became the standard for coinage in Europe 600 years later. Other coins, such as the Florin, Ashrafi, Grosh, Zeloti, and Guinea coins, were also introduced at the time by other European countries to facilitate growing trade. The Ducat coin remained the standard against other measured coins due to its prominent Venetian commercial role with the Islamic world and its ability to keep gold reserves fresh.
With the beginning of the conquest of the Aztecs and the Inca realm, Spain gained new gold reserves in addition to silver for coinage. The original unit for calculating Spanish gold was the Escudo, and the original coin was an 8-piece "Scudose", or "doblon", essentially weighing 27,4680 grams with 22-carat gold (92%) used in current measurements. , And in terms of weight had a value equivalent to 16 times the weight of silver. Widespread access to factory-made and handmade gold coins made it possible for independent Western companies to produce it in 1704 only through legal supply. The circulation of Spanish coins created a unit of exchange for the United States, which became the "dollar" based on the Spanish silver, and the Philadelphia currency market traded Spanish colonial coins.
As you know, money is backed by gold banknotes, and according to the gold reserve, paper banknotes are printed, because in ancient times, goods were exchanged for goods, and then gold for goods, and so on.
Gold-backed banknotes have been used for various financial reasons. Now suppose that exchanges are based on digital currency and its value becomes zero at some point. What is its backing?
Is digital currency valid? What is the backing of digital currency?
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