In most role-playing games, gold is the universal currency of choice. It provides some relatability with the fantasy world (gold is valuable!), and it’s an effective method for transporting wealth that is light enough to not encumber its owner. It’s ubiquitous to the point where it simply becomes just a number. But what exactly does the amount of gold you have mean in real-world terms?
The standard “gold coin” of our world would be the florin, which weighed 3.5 grams, or somewhere between a penny and nickel in weight. It was used mainly for commerce and banking, as such a high-valued coin would be worth much more than what most individuals would want to spend at one time. Instead, silver-based currency was used in many places including England, where the pound sterling literally meant one pound of silver way back when. The relative value of the two metals varied over the centuries, but typically one gram of gold was worth around ten to fifteen grams of silver. Doing some math, one gold coin would therefore range anywhere from about eighteen to twenty-seven pence in value, or one and a half to two and a quarter shillings. (Back then, there were twelve pennies to a shilling, and twenty shillings to a pound).
In the 14th century, a knight could be expected to make about 2 shillings per day (source), which translates to approximately one gold coin daily. A laborer, on the other hand, would only earn the equivalent of 20 gold coins per year, which is about one-fifth of the worth of a Dungeons and Dragons character’s starting equipment. One gold coin would be enough to buy about fifteen gallons of good ale, which is certainly a better deal by a couple orders of magnitude than what certain DMs have attempted to charge me.
The system tends to work well for people like commoners and knights, as there was a real-world basis for such an economy, but things tend to become a bit extreme when dealing with higher-level characters and gear. For example, a +1 piece of armor would be all but unattainable by anyone with a rank lower than baron. A Cloak of Charisma +2, listed as only a “minor wondrous item” costs about 4000 GP, which would have been enough to hire five laborers for their entire lifetimes, and would be worth about $500,000 in today’s money. A party of four 10th-level characters or one solitary person at 17th level would be able to finance the English crown for an entire year. An Everwhirling Chain, the most expensive item that I could find (which is frankly a rather anticlimactic weapon for its cost), comes in at a price of over 5 million gold, or about 20% of the GDP of medieval England. Translated into today’s money, it would be valued at over $700 million. In other words, that chain is more valuable than the Netherlands.
In Minecraft terms, it comes out to almost exactly one block of gold.