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 means of payment always had a material embodiment, then in the XX century money (types of money we will consider below) began to exist not only as material objects.
At first, money appeared in the form of coins, and it was still in ancient times. This type of means of payment has not yet gone out of circulation. Later, paper money was invented to replace metal money. But it was not possible to completely displace the coins with the help of notes. For a long time, these were the main types of money that existed in parallel.
Today new types of means of payment have appeared, but nevertheless, banknotes and coins have not gone out of use. They still continue to fill the wallets and pockets of the inhabitants.
Nowadays, metal coins, paper notes, electronic and credit money are in use. The choice of means of payment is very diverse, but their main essence remains unchanged.
What kind of money do they use today? Specialists of the financial market share types of money into 4 categories:
- commodity;
- credit;
- secured;
- fiat.
Commodity money
Initially, money appeared in society as material and in kind. That is, their function was performed by some product that could serve as a measure in 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.
Following came the coins, devoid of such a flaw, but also related to commodity money. Initially, they were made of gold, silver and other metals. It was easy to melt them and make them, for example, jewelry.
Commodity types of money exist today. For example, cigarettes acting as a means of payment can be considered such money in prisons.
Secured money
The next class is secured money. Types of money from this category are goods (certificates, signs) that can be exchanged for some amount of precious metal. They are also called bargaining or representative. In fact, they are representatives of commodity means of payment.
There is a version that the place of their initial appearance was Ancient Sumer. There they came up with clay burnt figures of sheep and goats to exchange for real animals upon request.
Banknotes were also considered to be secured money initially, while 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 its name has been preserved.
In the 13th century, the traveler Marco Polo brought news from China to Europe that paper money has been used by the Chinese for centuries. At that time, Europeans had only coins in everyday life. Only 3 centuries later in Europe they realized the practicality and convenience of banknotes, the provision of which was gold.
Fiat money
In another way, fiat money is called symbolic money, fake, decreed, paper. This means of payment is not secured by anything tangible, but is accepted as payment for goods and services. Fiat is all non-cash and electronic money, as well as funds on bank accounts and paper notes in our pockets and wallets. Some researchers are of the opinion that soon people will stop using paper money.
Many today prefer a non-cash payment method. In this case, not only plastic cards are used, but also types of electronic money that are accumulated in virtual wallets.
Credit money
There is a certain category of people who prefer to live on credit. Perhaps, another means of payment was created specifically for them - credit money. The types of money in this class actually constitute a formalized debt in a certain way. They can look differently. This is a credit card, check or bill of exchange. Money in the form of formalized debt is widespread today and serves to pay for goods and services almost everywhere, crowding out cash. This type of remedy 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 succeeds in returning them.
The evolution of money is a very interesting topic. What will happen in the future, time will tell. And although the disappearance of tangible means of payment and their replacement with fiat and credit money has been predicted for a long time, paper bills and coins are still in use and are not losing ground.