Basic Information
Money anything that is generally accepted as payment for goods and services and repayment of debts.
What constitutes "money" at any given point can therefore vary enormously. Key divisions are between commodity money, wherin the currency actually consists of a quantity of a given material and fiat money that is only valuable by mutual consent. Representative money where the currency is a convenient token for a given quantity of a given material (including non-portables such as energy or labour) usually exists in the transition between the two. All forms of currency have their benefits and drawbacks and which form(s) a society bases its economy on will depend on the nature of the economy1, society, government and other environmental factors.
Also notable is the fact that commodity money is further divided into consumable and non-consumable forms. A consumable currency has utility value in its own right (like grain, salt etc.) and has a tendency to be used up and can have very interesting economic characteristics2, whilst a non-consumable currency is something basically useless but persistent and exchangable (such as shells or gold) - a non-consumable commodity currency can also be tricky to balance between finding something that cannot be produced so readily that it can be made valueless, but common enough that it isn't too scarce for the size of the economy.
Fiat currencies rely very heavily on the probity of the money supply - if the producing authority produces too much currency, or is unable to prevent others from counterfieting it then the currency inflates and becomes valueless. The primary use for fiat currencies is to allow an economy to outgrow the available supply of any given commodity.
Categories of Money:
- Commodity Money - an actual resource used as money, such as an ore, grain, shells, etc.
- Bullion Coin - coins made of a rare resource
- Koku - the amount of rice that feeds one person for one year
- Credit Money - a future claim that can be used to make purchases
- IOU (debt) - a written promise to repay
- Letter of Credit - a primitive form of banknote issued by an individual
- Fiat Money - money that has order only because a government says so
- Electronic Money - money that is exchanged only electronically
- Federal Reserve System - the complicated system used by the United States, is part government-run and part private enterprise
- King's Imprimatur - money printed by royal decree and/or carrying value because the King says so
- Representative Money - money that can be exchanged directly for some valuable commodity
- Company Scrip - money issued by a company, and only usable at that companies stores
- Energy-Based Currency - where the currency represents a given amount of energy
- Gold Standard - money that can be exchanged for a specific quantity of gold
- Grain-Based Local Currency - money that can be traded for a certain share of a harvest
- Time-Based Currency - money that represents man-hours
- Token Coin - a coin of limited use for only specific purposes or only at certain shops
See Also:
Sources
Game and Story Use
- Money is probably the most common form of Treasure.
- Creating a setting (or part of a setting) in which this is not the case makes for an interesting subversion - arguably this is the case in a modern and/or sci-fi setting in which the PCs victims may very well not be carrying significant amounts of cash and whose credit accounts may be hard to access. This concept should also occur in early medieval, dark ages and pre-classical settings where specii is rare and/or doesn't travel well. This is where the PCs end up with large quantities of commodity based loot - commodity based money at best, but just as likely bales of cloth or livestock - and need to work smart to get full value out of it.
- A Nation or Empire might have several forms of money in circulation. See Dual Currency System.
