The idea is to create a unit of currency whose value is convenient for typical transactions. Some amount that is easily grasped by the average person. Originally the US dollar was 1/20th of an ounce of gold. That amount of gold, today, has the buying power of US$18, or so. A bag of groceries more or less. The amount of gold determines the total value of the money supply, but the number of people and transactions in which it must take part determines the number and denomination of bills and coins to be printed and minted.
in 1875 you could get a colt .45 for a $20 gold piece. you still can. I am sort of confused by all these folks talking about precious metals as if they still have something directly to do with currency. I thought they hadn't for some decades. josh