there are plenty of things which are scarce, but make terrible currency--four leaf clovers, for example. it all comes down to whether people desire the item and want to use it as a medium of exchange. in this case, gold is rare, durable, has a variety of industrial uses, and looks pretty. you don't have to trade gold, per se, you can use things which are backed by gold.
bit coin is intangible and has nothing of value backing it, much like 95% of all FRN assets.
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