Commodity Money vs Fiat Money

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Commodity Money

Commodity money whose value comes from a commodity. In short, it has its intrinsic value in term of the commodity of gold, silver or anything that posses its value. In history, the trading force was in commodities either gold coins or other valuable assets. Then the state starts issuing a written note of assuring the submission of commodities to state, and anyone can collect the parallel value from the state against the written note. That written note called Commodity Money.

FIAT Money

Surprisingly, fiat money has no intrinsic value by its own and it’s just a futile note. Fiat money is not backed by any gold or silver etc.

Simply, the state is assuring that the note posses a value written on it and the public trust that note. All currencies running in the modern world are fiat money.


In the current scenario of economical scams in which the terms; devalue of money, time value of money whatsoever is an impedance created by some powerful peoples to get their goal done. Commodity money is something very different, it going to the valuation of money with time.

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