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In real world, it is commonly thought that gold is the most valuable, then silver, then bronze (which is an alloy), etc. But it happens that uranium is more expensive than gold, even if there were no uranium coins ever. Platium also is more expensive than gold.

Moreover, during History gold has not always had the same price relation with silver, and in some times tin has been very valuable for making bronze.

How should a coinage system be crafted to be realistic?

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The monetary value of coinage can vary on many factors:

  • The rarity of the material used to make it, as you mentioned
  • The ease of using a particular metal for a coin
  • The stability of the economy or economies which uses the coin
  • The societal attitude towards certain materials
  • The confidence users of the coin have in the government that issues it
  • The aesthetic value of the coin
  • The difficulty of counterfeiting the coin

For example, in a primitive society where the economy is unstable and highly localized, the value of a coin might be entirely based on the value of the materials itself. In other societies, the value of a coin made with a mundane metal might be worth more because of its age or the government that pressed it (i.e., Valrosian ducats fetch 10 of any other bronze coin). In more modern societies, the metal used for the coin might not have any relation at all to its value because the the currency is backed by an idea rather than metal (see: the dollar).

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    $\begingroup$ Beauty, although not a 'hard' reason for value, surely has played a part in the choice of currencies throughout human history. Perhaps it has not affected values after they were selected, but there's a reason why conch shells, tanned hides, gems, and lustrous metals have been popular materials across cultures, as opposed to clods of the dung of rare animals and the occasional abnormal rock. $\endgroup$ – neph Sep 18 '14 at 5:58
  • $\begingroup$ I have liked all three answers so far (and upvoted them all as a consequence) but I am going to stick to this one. Thanks all. $\endgroup$ – Envite Sep 18 '14 at 9:02
  • $\begingroup$ Don't forget the difficultly to counterfeit. Platinium would not make as much sense for coins in the middle ages compared to gold as it is easier to make other things like silver, rhodium, etc. look like. $\endgroup$ – kaine Sep 18 '14 at 13:29
  • $\begingroup$ Good points - I've edited to include them in the answer. $\endgroup$ – Joshua Barron Sep 18 '14 at 14:18
  • $\begingroup$ Another factor is the lifespan of the materials. Metal degrades much slower than Styrofoam or paper. $\endgroup$ – droid Sep 27 '14 at 16:05
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A different approach to take is one of symbolism.

In Raymond Feist's Empire of Tsunami (The Empire Trilogy) metals are incredibly rare. As such only the richest lords and ladies can afford metal weapons. As such the value of any metallic coin would be worth far more than any normal citizen would ever earn in a lifetime.

As such a currency of counters is used (wood I believe). Much like paper money today (after all the paper a £20 note is printed on is worth far less than the value of the note). For this system to work the token must have the same value for each person, there must also be a level of trust and uniformity. In other words it must be organised my a higher power - a national bank or the crown for example.

Originally in western civilization this token system was developed with the paper represented real money in the bank. Indeed in the UK many of our notes still have printed "“I promise to pay the bearer on demand the sum of...".

Given this it's possible that a note/token could be paid out of a common material and used to represent one (or indeed 1/100, 1/1000 or 1/1000000) unit of valuable material (gold, silver, gems) stored by a trusted authority elsewhere.

The upshot of this from a world building perspective is you can actually use all sorts of weird and wacky currencies if they're set up and regulated by the ruling classes. If they pay their workers in beans (remember the Star Trek Voyager Ferengi episode with ears!?) because those beans will be regulated and authorised. People will trust them and will be willing to store their wealth in beans.

An aside but fascinating example. If you've ever played the online game Guild Wars there's a fantastic economy which has built up around ectoplasm. A character can hold a maximum of 99 platinum (which equates to 99,000 gold coins). As a result the elite players frequently hit upper limits on how much they could store. However you had far more space to store equipment. There is a substance dropped by some baddies (very rarely) in the elite levels which is used to craft the prestige armours. As a result many of these elite players wanted ectoplasm, and they could store far more of it than they could money. As a result a huge market opened up for ectoplasm with prices fluctuating between 4k and 8k per blob. The drop rates actually influenced the value so people's "stock" actually went up and down. The reason for this diatribe is to illustrate that a token with very little in game use (it just makes more dramatic looking armour) was used as an alternate unit of currency alongside the standard gold/platinum with it's own recessions and exchange rates!

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    $\begingroup$ +1 for the "aside but fascinating example" (which I do also find fascinating) $\endgroup$ – Garoal Sep 18 '14 at 9:50
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    $\begingroup$ +1, not only for reminder me the times I played Guild Wars (btw. I was no elite player, and the only glob of ectoplasm I had I bought for some pyrotechnics worth 5 platinum - alcohol, sweets and pyrotechnics were not so elite and more stable, but also an almost established currency in GW, usually worth 200 gold per point). The relationships between player-environment and player-player economy in MMOs ARE fascinating. $\endgroup$ – Pavel V. Sep 18 '14 at 12:30
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    $\begingroup$ @PavelV. if I ever do a phd it'll be on artificial currencies in controlled environments (like guild wars/Warcraft etc) $\endgroup$ – Liath Sep 18 '14 at 12:32
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In a metallist economy, the value of the coinage is dependent on the scarcity of the metals in question, its purity, and the reputation of the issuing authority for the purity of their coinage.

As an example, in many cultures, Gold is considered more valuable than Silver. However, in ancient Egypt, Silver was more highly valued then Gold due to its scarcity.

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There are two additional things which make gold an ideal money metal:

  1. It is easily distinguishable from most other materials (and thus harder to fake).
  2. It doesn't corrode in any way.
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