I've always wondered why gold has always had such intrinsic monetary value. Sure, I know the textbook reasons: compactness, recognizability durability, scarcity, impossibility of counterfeit. But the point is it has limited industrial value. The world could get along fine without it. Even a lump of copper or a bushel of wheat is actually useful for something. How did everyone get together and develop enough confidence in the purely arbitrary value of this substance to trade it for any object that takes real work and effort and even risk to create, and that can then be consumed?

The amount of gold in the world is constantly changing. Some is lost in shipwrecks at the bottom of the sea, or squirreled away in the tombs of Pharaohs. More of it is mined every day. A large amount is locked up in personally owned jewelry and decorative objects, too valuable from sentiment or workmanship to be used as money. A small amount is consumed in industrial uses, such as false teeth or coatings on astronaut helmets, or electrical contacts in electronic equipment. At any time, we can trade a piece of it for something else. something of real value.

Sure, I know we can't live by barter alone, but why gold? Wouldn't anything else do just as well, as long as it was scarce, durable, and impossible to counterfeit?

Gold has a value, but it is heavy and inconvenient to carry around, so we replace it with paper currency that represents an equivalent value of gold. But carrying large amounts of paper currency is insecure, so we substitute checks and bank drafts for that. But that is inconvenient to commerce, so we substitute electronic fund transfers to and from abstract accounts for that. And so on, and so on. Sooner or later, it's all just accounting, and accounting is easy to counterfeit, easy to lose track of, and dependent on elaborate administrative systems and institutions.

The Indian civilizations of the New World valued gold as a decorative and ritual substance. It was hard to mine and to smelt, so it had a value, you had to pay a miner (or enslave one) to get it for you. But it was not a medium of exchange (although I'm sure supply and demand set its value equivalent in other goods and services, like corn, hours of skilled labor, or a well-crafted obsidian axe-head). For the Andean and Meso American empires, gold was just another commodity, like yams or potatoes.
They got along fine without adopting it as a medium of commercial exchange.

But the Spaniards had other ideas altogether....