Do we still need gold as our backup currency?

Gold has been playing an extremely important role in our global economy for centuries. In the past, gold was used by many nations as their currencies and made the international trades possible. Without of the Gold Standard, the current paper money system could have taken much longer time to be built; and the gold standard exists until the mid of the last century. Even more, gold is still playing an important role as a sort of way to hedge against an increasingly risky market. However, even when we are in a crisis, can we replace our current money by gold?

In some countries which have many unstable political and economic environments, people may use gold as their medium of exchange; however, they are more likely to use other mediums of exchange, such as the US dollar, illegal drugs, cigarettes. Why are these alternatives more popular than the gold? These alternatives are much easier to carry and they have similar characteristics as the gold does, so their values can be secure. Is there any situation that only gold and similar precious metals can survive but other mediums cannot?

Such situation requires a meltdown of the global monetary system, which is very unlikely to happen at the moment, even if there is a war taking place. Even when such an unlikely event happens, gold may not solve the problem. Firstly, gold has mostly been stored and concentrated in certain places. It is very difficult to distribute the gold among the population. If it cannot be distributed easily, its price may rise sharply but is not able to solve the problem in the system. Secondly, even if a country reintroduces the Gold Standard, the credibility of a government after a meltdown of the global monetary system may not be able to support the Gold Standard. Moreover, as the gold is so concentrated and stored, a government may not be able to hold enough gold to reintroduce the Gold Standard.

Therefore, I think that if when the monetary system is in danger, the price of gold will certainly rise sharply, but gold itself cannot be the solution to any problem in our monetary system.