Money

From ArticleWorld

Money is any medium that has a set value for the use of exchange or purchase. The need for money as a medium has been a requirement in any society. Even the Spartans learned this as they used iron rods as their form of currency.

Going beyond bartering=

Trade without money more often than not is the direct bartering of one commodity for another. Bartering is often inefficient because it requires wants between traders of equal value. The emergence of some form of money is a natural market requirement that is born repeatedly across civilizations and is not dependent on any centralized authority or government. Indeed, the division of work in any but the most basic of forms cannot occur without it.

Commodity money

Commodity money was amongst the earliest forms of money to emerge. The commodity money has an inherit value due to the value that is backing it, typically it is backed by gold or some other material or mineral. This is ideal if the currency used is not used else where the money can be converted into a base that will have value elsewhere. In many cases this currency is actually a gold base so that the currency will have inherit value elsewhere.

Fiat Money

This is a more modern means of currency or money. It is a centralize form of currency that is recognized through the region and is the basis for paying tribute or taxes to the land. The currency is the main means of paying the government so that backs the credibility of the currency, as the government will no accept other means of payment. This payment must be done, by penalty of law. This instigates the value of the money and encourages the citizens to use it as a base currency. If there are tariffs on imported and exported goods this can also encourage the value of the currency world wide.