3. Now to the specific question: what about non-fiat money? What about "gold" as a currency? This is what I consider to be the trickiest problem and one that I don't entirely understand. I think that anthropologists probably have the best insights here, and I don't read a lot of anthropology (nor the economists who do, as they usually publish in specialized journals AFAIK). But anyway . . .
Here's a tl;dr that doesn't capture the whole analysis but does address the comparison between gold and salt. Salt isn't a good currency because its value comes from its consumption (assuming Mad Max is actually a fantasy). The only value to the non-fiat thing extinguishes it, which is sort of the opposite effect from what we would want. That is to say, anything really useful isn't a good candidate for non-fiat money. Anyway, back into the analysis.
A. Let's first start with the way that non-fiat currency would be implemented in today's world: currency tokens that are freely exchangeable for some reserve, like gold. There's a simple reason it has to be implemented this way: money should have no value in itself, because then people will raid the money. For instance, if we used gold coins for trade, people would shave off just a little bit of gold for their own stash before using the coin. This definitely occurs in prisoner camps (which are a source of knowledge about how money works in the absence of a controlling authority) where people use, say, cigarettes as currency. People would tap out a bit of tobacco for their own stash -- you know, to have your currency and smoke it too! -- until the cigarettes just become pathetic half-full rolls of paper.
In a fiat currency world, it doesn't matter whether the cigarettes get emptied out, as long as the thing remains recognizable as a currency. But we're assuming no fiat, meaning that the currency itself is supposed to have value (i.e. a way of using it that is valuable in case you can't find a buyer). The only way that can work is to have a paper currency that can be freely traded (usually by law) for a certain amount number of cigarettes or a certain amount of gold, etc. BTC does not have this problem because you can't shave off some BTC before selling it.
B. OK, so now we have our tokens. Now we just need a reserve product that can be freely traded for currency. And now we can get to the question originally asked: what reserve product should we choose? Well, it has to be scarce. If you use salt, then people can just get rich by boiling seawater and you get inflation. But obviously scarcity is not enough; it has to also be something that people want. If the government mandated that dollars can be freely converted into and from high-tech kazoos, we basically have a fiat currency because nobody would want to exchange their dollars. This is a basic failing of most theories of BTC value. Ultimately, these folks operate as if scarcity is not only a necessary property of money, but a sufficient one as well. It is not.
What else? Ideally, it would be compact, so you don't need a wheelbarrow to transport, but this isn't really that big of a problem so long as the reserve substance is divisible. That's not true of beads but is true of gold and salt. As long as it's divisible, then the exchange rate can adjust if physical transport is too onerous.
It should be useful, in a way that isn't consumptive. This was a tl;dr from above, and it makes obvious sense. To expand on the point, useful commodities cannot be money. The purpose of the money is to allow you to buy what you need. If salt is money and it becomes scarce, then people will start to hoard their salt and/or consume it. That will lead to further scarcity, and further hoarding, and the economy will be destroyed because people will prefer to eat their money than spend it.
C. So what is a thing that has value without being consumed? Gold. Why? Because, like the fake diamond in Donnie Brasco, you can give it to your wife. Seriously. Women want to be beautiful and like jewels that make them look beautiful. Men want their wives (who they more or less owned in ancient societies where gold was money) to look beautiful, as it confers social status. Where gold is not available, cowrie shells will have to do.
Social status is one of humans' most innate desires. And since economic power usually confers social status, people have an instinctive desire to find things that show it off. They get status without having to exercise their economic power. Gold's advantage over so many other metals is that it is so readily identifiable. It's shiny and yellow and unmistakably gold (at least in more primitive societies). If you make it into a crown, and wear the crown, you are projecting your economic status. Diamonds didn't have the same value; from a distance a diamond might look like quartz, and so a person needs to inspect the diamond before acknowledging its value. But the rich person doesn't want everyone inspecting his stuff to see that he's rich. He wants them to bow to him on sight. Thus, gold.
Hmm. I wonder if, in writing this, I've solved the problem in my own head a little bit.
This explains the emergence of NFTs, right? Bitcoin is unobservable. You can't put BTC on your twitter profile. You can't use BTC to show off your economic power. But, online, you can use NFTs, in theory. That's why the IP issue in NFTs was always so important (and because of the difficulties, expensive NFTs have not to my knowledge been anything other than a fad). If anyone can put the penguin you just bought on their twitter profile, then you've lost the ability to project your status. The penguin itself no longer demonstrates wealth.
****
Anyway, this was quite a disquisition and I have to emphasize: I'm not speaking with tremendous authority here, and I'm not going to try to tease out which sub-issue is backed by expertise and which isn't. I'm confident that the coin-shaving or cigarette tapping examples did happen, and they helped account for the rise of the value-backed token as a substitute for direct trading of the valuable item. Most of the rest is a blend of knowledge, my own musings and logic.
