Comment by busssard
4 hours ago
Its the difference between gold and fiat.
Pirates wanted gold because they did not belong to any State to issue them IOU.
But owning the gold in a locker and trading with the IOU of the bank means you need to trust the bank instead.
You skipped the step where gold and silver is used as coinage for everyday transactions. You can in fact own the physical metal and spend it without an IOU.
Although you physically can transact with physical gold. It isn't practical.
Today or back in the day?
Its absolutely practical to trade in gold/silver historically. Its basically just how europeans do small transactions anyways (coins).
Anything larger its still practically because if you need to buy an expensive item well its going on the ship so who cares if you need a ship or cart to transport the cost of the item when you need a cart anyways to transfer the item.
It’s just mostly impractical at the scale of big business. Imagine banks transport gold or $100,000 bills to each other (but actually look up how they used to drive trunks to each other and fling bags of checks).
Today or ever? Today I'd expect silver to be more common purely for the market price of it. The only thing stopping people from using metal coins today is that no one else does.
If I were selling a car and someone had gold coins to buy it with, I'd happily take it.
Pirates of the Spanish Main, Pieces Of Eight popular conception wanted plunder, and gold was being shipped in fat galleons. Fiat currency was not available for them to plunder, because banknotes were not, in any significant commune, mined in Spain's new-world colonies and transported to Castile.
Pirates were not necessarily stateless. Drake sailed with a letter of marque. I'll grant there may be contemporary pirates off the horn of Africa who would be hard pressed to obtain a passport.
Blackbeard's thoughts on financial mechanisms are lost to us, sadly.
I think you're trying to explain that fiat currency is predicated on trust. Thanks; that cleared up some misconceptions.
Unfortunately, it turns out that crypto is also, on inspection, predicated on trust: chiefly, trust in the infosec of whatever party maintains your wallet. That trust has been violated maaany times. I've also personally formatted a disk holding a decent chunk of coin (fuck me for trusting myself).
A better analogy would be if gold could spontaneously vaporise and escape any container. Hydrogen is notoriously difficult to contain - it would be a more accurate metaphor.