The reason to back a currency with gold or some other commodity is that the commodity has other utility aside from being used as money. This sets a floor on the price, making it a store of value.

• Utility is not a necessary aspect of money. Only 5-10% of gold's value is tied to its industrial use (per chatgpt). This floor is not so reassuring then if the asset would plummet 90-95%. Other commodities, such as silver, have a greater industrial utility. That makes it less suitable as money since its value becomes tied to commodity cycles.

The reason to back a currency with gold or some other commodity is mainly due to its scarcity, which puts a limit on money creation (done through fractional reserve bankning).

The reason to back a currency with gold or some other commodity is that the commodity has other utility aside from being used as money. This sets a floor on the price, making it a store of value.

Utility is not a necessary aspect of money. Only 5-10% of gold's value is tied to its industrial use (https://www.statista.com/statistics/299609/gold-demand-by-industry-sectorshare/#:~:text=The%20jewelry%20industry%20accounted%20for,China%2C%20Russia%2C%20and%20Australia). Another 40% is used for jewellery.

This floor is not so reassuring if the asset were to plummet 50%. Other commodities, such as silver, have a greater industrial utility. That makes it less suitable as money since its value becomes tied to commodity cycles.

The reason to back a currency with gold or some other commodity is mainly due to its scarcity, which puts a limit on money creation (done through fractional reserve banking).