Money. Types of money and their purpose

People have been using money for thousands of years. During this long time, the monetary system has undergone many changes. If in the XIX century the means of payment always had a material embodiment, then in the 20th century money (the types of money we will consider below) began to exist not only as material objects.

In the beginning, money appeared in the form of coins, and it was back in antiquity. This type of payment means has not yet come out of circulation. Later, paper money was invented to replace metal money. But to displace coins with the help of notes completely failed. For a long time these were the main types of money that existed in parallel.

Today new types of payment instruments have appeared, but nevertheless, bills and coins have not fallen out of use. They still continue to fill wallets and pockets of the townsfolk.

Nowadays there are metal coins, paper bills, electronic and credit money. The choice of means of payment is very diverse, but their main essence remains unchanged.

What are the uses of money today? Types of money specialists in the financial market are divided into 4 categories:

• Commodity;
• Credit;
• Secured;
• Fiatnye.

Commodity money

In the beginning, money appeared in society as material and natural. That is, their function was performed by a certain commodity, which could serve as a measure in the exchange for other items. Commodity money could be animal skins, shells, pearls and much more, which has a certain value in the society of people. Such a means of payment had one significant drawback - a very large variety in nature.

Next came coins, devoid of such a defect, but also related to commodity money. Originally they were made of gold, silver and other metals. They were easy to smelt and make from them, for example, jewelry.

Commodity types of money exist today. For example, such money in places of deprivation of liberty can be considered cigarettes, which serve as a means of payment.

Money secured

The next class is secured money. Types of money from this category are goods (certificates, signs), which can be exchanged for some amount of precious metal. They are also called bargains or representative ones. In fact, they are representatives of commodity payment means.

There is a version that the place of their original appearance was Ancient Sumer. There, they invented clay fired figures of sheep and goats for real animals on demand.

They considered money from the very beginning and banknotes as long as they assumed the presence of a certain number of coins made of metal. Today, the gold standard is canceled. Paper money is symbolic money, although their name has survived.

Traveler Marco Polo in the XIII century brought from China to Europe news that paper money has been used for many centuries by the Chinese. The Europeans in those days used only coins. Only for 3 centuries later in Europe they understood the practicality and convenience of the notes, the provision of which served as gold.

Money fiatnye

In another way, phantom money is called symbolic money, not real, decreed, paper. This means of payment is not provided with anything tangible, but is accepted as payment for goods and services. All non-cash and electronic money, as well as funds on accounts in banks, and paper notes in our pockets and purses are all fiat. Some researchers hold the opinion that soon people will stop using paper money.

Many today prefer the non-cash payment method. In this case, not only plastic cards are used, but also types of electronic money, which are accumulated in virtual purses.

Money credit

There is a certain category of people who prefer to live in debt. Perhaps, specifically for them was created another means of payment - credit money. Types of money in this class are in fact a defined form of debt. They can look different. This is a credit card, check or bill. Money in the form of issued debt is now widespread and serves to pay for goods and services almost everywhere, forcing out cash. This type of means is fraught with danger and a psychological trap. This is due to the fact that it is possible to take funds from the account in any quantity, but not everyone can return them.

Evolution of money is a very interesting topic. What will be in the future, time will tell. And although the disappearance of material means of payment and their replacement by fiat and credit money is predicted for a long time, paper notes and coins are still in use and do not give up their positions.