Mike Moffatt Updated on July 19, 2019 An extensive essay on the gold standard on The Encyclopedia of Economics and Liberty defines it as: a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. Fiat Currency vs. The Gold Standard. The gold standard system allowed for paper banknotes to be converted into gold at any time. In point of fact, the government controlled a limited quantity of gold reserves, which ensured the value of all paper currencies. In a monetary system that was pegged to physical commodities such as gold, governments Forms of money are continually evolving, as they have since the days when people accepted seashells for payment and a gold standard existed to the arrival of fiat currency. Digital currencies are Gold Standard Video Series. Part 1: How the Gold Standard Compares to a Fiat Money System (2:04) Part 2: Gold Standard and Inflation (3:00) Part 3: Purchasing Power (3:17) Part 4: Benefits of a Fiat Money System (2:23) Part 5: The Gold Standard and the Central Bank (1:46) meaning "let there be light!". Thus, fiat money means money that are created by the government decree - they would be random worthless pieces of paper otherwise, so the government says "let this paper be worth $100" and it becomes $100. Non-fiat money have some value that is beyond declaration - e.g., gold coin has the value of gold that is Fiat Currency vs. Representative Money. Representative money is also produced by the government, but unlike fiat money, it's backed by a physical commodity. From there on, the gold standard .

fiat money vs gold standard