Money anything that is generally accepted as payment for goods and services and repayment of debts. The form or forms of money acceptable within a given culture is known as a currency.
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.
Thus, money serves as a medium of exchange and, in many cases a store of value (although, as noted above, some currencies store value over time better than others). The economic doctrine of capitalism also treats money as a good in its own right which can be bought, sold and rented out without being immediately exchanged for anything.
Categories of Money:
- Commodity Money - an actual resource used as money, such as an ore, grain, shells, etc.
- Credit Money - a future claim that can be used to make purchases
- Fiat Money - money that has order only because a government says so
- Representative Money - money that can be exchanged directly for some valuable commodity
- Blood Chits - issued by the military to pay for assistance to their personnel in distress
- 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
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.
- Transferring money between cultures may be "interesting" - most players should have no problems with modern fiat money being limited to its country of origin (although even in this case, some currencies "travel" better than others), but in pre-modern settings there may be legal restraints on spending, or even owning "foreign" money with some jurisdictions obliging travellers to exchange all of their money for local issue (for a fee, naturally) - these may also be the sort of jurisdictions whose own money is not popular anywhere else. On the other hand, bullion coins may be widely accepted - by weight if nothing else - in some places … setting designers should consider such issues.