system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why was the gold standard abandoned by the US (and many other countries)? What was wrong with it? What benefits did we get from the new system of currency (I believe it's called the Fiat system)?
gpt
Tying the value of a currency to a fixed resource (such as gold) is inherently dangerous because it doesn't allow you to control the value of your currency.

Consider what occurs in the classic banana republic.  The government prints too much money and the value of that money collapses.  This creates a huge incentive for people to spend money immediately - if you don't spend it, it's value vanishes under an avalanche of inflation.

The reverse happens with the gold standard.  It encourages extreme frugality.  Because the amount of gold isn't changing (much) but the quantity/quality of goods and services is increasing, the gold standard tends to create *deflation*.  This might sound good, but when everyone is clutching their money as tightly as possible commerce ceases - which is also a big problem.

Through trial and error, we've determined that the best system tends to be slightly inflationary.  You're giving people a bit of a nudge to spend their money, but not enough of a nudge that they never invest in anything.  But to keep your currency in this ideal mildly inflationary zone, you can't link it to an unrelated commodity.