Editing Gold standard (section)

===Silver and bimetallic standards until the 19th century===

The use of gold as money began around 600 [[Common Era|BCE]] in Asia Minor<ref>{{cite web|title = World's Oldest Coin - First Coins|url = http://rg.ancients.info/lion/article.html|website = rg.ancients.info|access-date = 2015-12-05}}</ref> and has been widely accepted ever since,{{sfn|Lipsey|1975|pp=683-702}} together with various other commodities used as [[money]], with those that lose the least value over time becoming the accepted form.<ref>{{harvnb|Bordo|Dittmar|Gavin|2003}} "in a world with two capital goods, the one with the lower depreciation rate emerges as commodity money"</ref> In the early and high [[Middle Ages]], the [[Byzantine Empire|Byzantine]] gold [[Solidus (coin)|solidus]] or ''[[bezant]]'' was used widely throughout Europe and the Mediterranean, but its use waned with the decline of the Byzantine Empire's economic influence.<ref>{{cite journal|last=Lopez|first=Robert Sabatino|title=The Dollar of the Middle Ages|journal=The Journal of Economic History|date=Summer 1951|volume=11|issue=3|pages=209–234|jstor=2113933|doi=10.1017/s0022050700084746|s2cid=153550781 }}</ref>

However, economic systems using gold as the sole currency and unit of account never emerged before the 18th century. For millennia it was silver, not gold, which was the real basis of the domestic economies: the foundation for most money-of-account systems, for payment of wages and salaries, and for most local retail trade.<ref name="moneylec">{{cite web|pages=13–14 sec 5(f)(g)(h)|url=https://www.economics.utoronto.ca/munro5/MONEYLEC.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.economics.utoronto.ca/munro5/MONEYLEC.pdf |archive-date=2022-10-09 |url-status=live|title=MONEY AND COINAGE IN LATE MEDIEVAL AND EARLY MODERN EUROPE|website=Economics.utoronto.ca|access-date=3 March 2022}}</ref> Gold functioning as currency and unit of account for daily transactions was not possible due to various hindrances which were only solved by tools that emerged in the 19th century, among them:
* '''Divisibility:''' Gold as currency was hindered by its small size and rarity, with the dime-sized [[ducat]] of 3.4 grams representing 7 days' salary for the highest-paid workers. In contrast, coins of silver and [[billon (alloy)|billon (low-grade silver)]] easily corresponded to daily labor costs and food purchases, making silver more effective as currency and unit of account. In mid-15th century England, most highly paid skilled artisans earned 6d a day (six pence, or 5.4&nbsp;g silver), and a whole sheep cost 12d. This made the ducat of 40d and the half-ducat of 20d of little use for domestic trade.<ref name="moneylec" />
* '''Non-existence of token coinage for gold:''' Sargent and Velde (1997) explained how token coins of copper or billon exchangeable for silver or gold were almost non-existent before the 19th century. Small change was issued at almost full intrinsic value and without conversion provisions into specie. Tokens of little intrinsic value were widely mistrusted, were viewed as a precursor to currency devaluation, and were easily counterfeited in the pre-industrial era. This made the gold standard impossible anywhere with token silver coins; Britain itself only accepted the latter in the 19th century.<ref>{{Cite web|url=https://www.chicagofed.org/publications/working-papers/1997/wp-13|title = The Evolution of Small Change - Federal Reserve Bank of Chicago}}</ref>
* '''Non-existence of banknotes:''' Banknotes were mistrusted as currency in the first half of the 18th century following France's failed banknote issuance in 1716 under [[John Law (economist)|economist John Law]]. Banknotes only became accepted across Europe with the further maturing of banking institutions, and also as a result of the Napoleonic Wars of the early 19th century. Counterfeiting concerns also applied to banknotes.

The earliest European currency standards were therefore based on the [[silver standard]], from the denarius of the Roman Empire to the penny (denier) introduced by [[Charlemagne]] throughout Western Europe, to the [[Spanish dollar]] and the German [[Reichsthaler]] and [[Conventionsthaler]] which survived well into the 19th century. Gold functioned as a medium for international trade and high-value transactions, but it generally fluctuated in price versus everyday silver money.<ref name="moneylec" />

A [[bimetallism|bimetallic standard]] emerged under a silver standard in the process of giving popular gold coins like [[ducat]]s a fixed value in terms of silver. In light of fluctuating gold–silver ratios in other countries, bimetallic standards were rather unstable and ''de facto'' transformed into a ''parallel bimetallic standard'' (where gold circulates at a floating exchange rate to silver) or reverted to a mono-metallic standard.<ref>
{{cite web|title=Swedish monetary standards in a historical perspective |author=Rodney Edvinsson |pages=33–34 |url=https://www.riksbank.se/globalassets/media/forskning/monetar-statistik/volym1/2.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.riksbank.se/globalassets/media/forskning/monetar-statistik/volym1/2.pdf |archive-date=2022-10-09 |url-status=live}}</ref> France was the most important country which maintained a bimetallic standard during most of the 19th century.