Of course gold is not magical, I don't clam it is.
The coin form is just for exchange, gold itself is the base money.
> The IOU, if not attached to a specific name, is just as good and exchange medium as that coin.
This is where you are wrong. Exchanging a IOU of a third party increases the trust relationship to a third party. That is useful to do, and that's why banking exists, but it is not inherent or required.
> Even better perhaps because the value is not in the material itself, but in what it can be exchanged for.
Yes. But again. It is still bound to the base money. Look into how historical note issuing banking system work, there are great resources on this. The banks exchange the gold when they get other notes. Then they further abstract and establish clearing houses that do multiparty exchange.
Note here that the relationship always grow complex and more trust is involved, but it is all based on the soundness of the underlying base system.
The IOUs, banking and all are simple not required for something to be money.
The coin form is just for exchange, gold itself is the base money.
> The IOU, if not attached to a specific name, is just as good and exchange medium as that coin.
This is where you are wrong. Exchanging a IOU of a third party increases the trust relationship to a third party. That is useful to do, and that's why banking exists, but it is not inherent or required.
> Even better perhaps because the value is not in the material itself, but in what it can be exchanged for.
Yes. But again. It is still bound to the base money. Look into how historical note issuing banking system work, there are great resources on this. The banks exchange the gold when they get other notes. Then they further abstract and establish clearing houses that do multiparty exchange.
Note here that the relationship always grow complex and more trust is involved, but it is all based on the soundness of the underlying base system.
The IOUs, banking and all are simple not required for something to be money.