Types of Money

Fiat

Definition: Legal tender, declared by government regulation.

Value: Not backed by a physical commodity; its value comes from government decree and trust in the issuing authority.

Examples: USD, EUR.

Definition: Represents a claim on a commodity that can be exchanged.

Value: Backed by a physical commodity held in reserve (e.g., gold, silver).

Examples: Gold certificates, silver certificates.

Definition: Physical goods used as a means of exchange.

Value: Intrinsic value of the commodity itself.

Examples: Gold coins, salt, cattle.