Why Don’t We Use Gold to Buy Coffee?

Why don’t we pay for coffee with gold? It’s a fair question — after all, gold has been considered money for thousands of years. But if it’s so valuable, why don’t we use it for everyday transactions? 

In a recent video, Alan Hibbard unpacks this common misconception, offering a powerful explanation of why gold still matters — not as a medium of exchange, but as a store of value. Below, we’ve broken down the key concepts from his talk, laying the groundwork for what will be a six-part educational series, Hidden Secrets of Value. 

What It Means to “Use” Money 

Most people think of “using” money as spending it. You swipe a card, hand over a bill, and a transaction is made. But Alan challenges that assumption. 

When it comes to monetary assets, saving is using. In fact, saving — or storing value — is one of the most important use cases of money. Gold isn’t used to pay for groceries because that’s not its role. It’s not about inefficiency or weight. It’s about design. Gold is meant to store purchasing power over time, not to serve as your daily transaction tool. 

Just like you don’t drive your house or live in your car, you don’t spend your savings — at least not every day. 

The Monetary Trilemma: Why No Asset Can Do It All 

Here’s where it gets really interesting. Alan introduces the concept of the monetary trilemma — a framework that explains why no monetary asset can simultaneously be: 

• Secure 

• Decentralized 

• Scalable 

You can pick two, but never all three. 

Gold is secure (it’s hard to counterfeit) and decentralized (no central party controls it), but it’s not very scalable — it’s heavy, expensive to move, and hard to divide for transactions. 

Fiat currencies, on the other hand, are scalable and often secure, but not decentralized. They’re issued and controlled by central authorities, and over time, this leads to erosion of trust as inflation eats away at their value. 

Understanding this trilemma helps clarify why different assets serve different roles. It’s not about replacing currency with gold; it’s about recognizing the distinct strengths and limitations of each. 

Layered Money: Why Gold Still Sits at the Foundation 

To visualize how money works today, Alan shares a layered system — a monetary pyramid. At the base sits gold, the foundation of real money. Everything above it — paper banknotes, digital deposits, credit — is a promise to pay something more fundamental. 

Gold is “Layer 1” money. Everything else is a derivative built on trust. 

While we’ve formally removed gold from most official currency systems (especially since 1971), it hasn’t disappeared. People around the world still use it — not in transactions, but to preserve wealth. That’s the key. 

When currencies fail or trust in central banks breaks down, people don’t flock to new fiat… they return to gold. 

Gold’s True Value Is in Preservation — Not Transactions 

So, why don’t we use gold to pay for coffee? 

Because gold plays a different role: it preserves value across time, not across a counter. It’s the asset you hold when you want to opt out of inflation, financial repression, or broken monetary promises. 

In any sound monetary system, money and currency serve two distinct purposes: 

• Currency is for speed and transactions. 

• Gold (money) is for trust and preservation. 

They are complementary — not competing. 

If you want to understand how gold fits into the bigger monetary picture, start with this video. 

Investing in Physical Metals Made Easy