I'm still studying, but one of the problems of the competing currencies in the past was possibility of local manipulation of the economy. Basically, the richest guy in town creates his own currency, and forces everyone to use it - Basically script issued by company stores. Then one individual could manipulate the value of the script to their advantage. Other times, individuals would offer currency, buy things up with it, and then let it go bust.
Similar things can happen with government currencies too, but in principle, one stable trusted currency would be better than competing currencies, since it would avoid the work required to choose the best currency for yourself, and the risk of loosing money from a bad decision on currency is reduced. In a nutshell, we have tried competing currencies, and so far Gold has won.
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