Once upon a time in America, paper money was actually used as a certificate that guaranteed the existence of some sort of commodity somewhere – a commodity like gold or silver. This is the basis of the “gold” or “silver” standard of currency, in which paper money is simply something that can be converted into a pre-set amount of silver or gold.

The differing terms “silver standard” and “gold standard” simply refer to the different types of commodities these two metals might be converted to. Today, we don’t use these systems, as they have been replaced by the fiat currency system, in which the money’s value is not tied into a commodity, but tied into itself as a form of payment.

Many people believe that we should revert to a gold standard or silver standard, and while the topic is one of hot debate, let’s ask ourselves a unique question. Of the two types of commodity standards, which is better: gold or silver?

Let’s look at each to find out.

The Silver Standard

Silver was actually the first metal to be used as currency, as well as one of the first “International” currencies when the city-state of Athens used a “silver tetradachm” as its standard for trade in the Mediterranean sea. In ancient Persia, likewise, silver was used as a currency that was the most popular metal to be traded. These ancient examples of silver as a currency could be considered the first silver standards.

After the discovery of the New World, in which new abundant sources of silver were discovered, it was more common to mint silver coins, especially in the British and Spanish Empires (the British “pound sterling,” for example, refers to a type of silver). Eventually, Britain converted to the gold standard and because of its influence, many other countries followed suit.

In 1785, the United States of America adopted its own silver standard, but the standard would not last as many banks would suspend their silver payments in times of crisis. In the late 1800s, the gold standard was adopted.

The Gold Standard

Gold has likewise been used since the dawn of civilization as a way to trade, much like silver, however gold’s more infrequent availability has kept it at higher prices than silver. Many countries that adopted the silver standard after the discovery of the New World would eventually change to gold, including Great Britain well before the existence of the United States.

The United States turned to the gold standard in 1873, rubbing those who owned silver mines in the west the wrong way. Gold has also been used in a wide variety of wars as financing, and after the second World War, much of the world abandoned the gold standard because of the widespread depletion of gold stock, particularly in Great Britain.

Richard Nixon announced in the 1970s that American currency would no longer be traded for the commodities that they were supposed to represent, which essentially lead to an abandonment of the gold and silver standards and lead to the adoption of fiat currency, which is explained above.

So Which is Better?

Many people believe that a return to the gold or silver standard would lead to a more consistent monetary system. Which is better? It can be hard to say because each standard offers it own advantages – gold is highly valuable and offers a more potent form of currency, while silver’s higher availability makes it more ideal for widespread trade. Some people advocate bimetallism, a concept in which both metals would essentially be used.

Today, it can be more beneficial to turn silver and gold into dollars than the other way around. That’s why selling your spare gold, platinum, or silver has grown in popularity, particularly in these tough economic times when money is a little more scarce. Here at Sell Gold HQ, you’ll gain insights as to how to turn your own gold and silver possessions into cash.

The gold and silver standards were built around the ability to turn your cash into a precious metal, but today many people feel that the value of gold and silver is that they can be sold and turned into dollars and pounds. Continue to explore Sell Gold HQ in order to learn more about how to sell your precious metals.