system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What is the underlying concept behind a gold-standard currency vs fiat money? Can you explain the pros and cons in a simple way?

If there are any economists out there your simplified answer would be appreciated! :)
[edited for spelling]
gpt
A tangible currency, like the gold standard, pegs the currency to a specific amount of a limited substance.  It doesn't matter if it's gold or puka shells, the currency is constrained by the amount of the substance in the possession of the government.

The Pros: 

• No inflation (unless a new source of the substance is found).

The Cons: 

• Collapse if a new source of the substance is found.

• No fractional lending.  This significantly reduces economic activity because "somebody" has to have the gold to back the loan you want to take out to buy that car/house/business/... .