Money is a medium of exchange that has always been used to make transactions. Without money, we can’t pay anything.
But did you know there are four types of money in this world? Usually, we often see paper money and coins. It turns out that there are four types of money that we should know.
If you are a fan of coins, then you are no stranger to the 1955 double die penny. It is one of those pennies that has a high price in the market due to errors or variations.
Penny cents are one of the most common types of money we encounter. In addition, there are several types of money that we should know.
Types of Money in the World That We Must Know
There are four types of money in the world. Because the main function of money is as exchange value, calculating value, and storage.
Here are some types of money that exist in the world:
- Commodity Money
This type of money is the most common and the oldest in the world. Commodity money is money made from natural resources and is intended as a medium of exchange.
This commodity money comes from the barter system. In the past, people transacted by exchanging goods and services.
One type of commodity money was the 1955 double die penny made of bronze, which at that time was a natural resource.
- Banknotes
Paper money is money that we use almost every day. These banknotes have a fiat value given by the government.
Fiat money is a means of payment that has been legalized by the government for transactions. These banknotes have significantly become a means of payment as a result of supply and demand.
Each country has the authority to print money based on government regulations. The modern economy is dominated by the use of paper money.
The nominal value of these banknotes is much larger than coins.
- Security Deposit
Security deposit is one of the legal means of exchange and means of payment. But not everyone has this kind of money.
Fiduciary money is a type of money that can be exchanged for people who have valid evidence. Examples such as checks, money orders, or banknotes.
The issuer of this security deposit must exchange it for money if requested by the owner.
- Commercial Bank Money
This type of money is money that almost everyone in the world has. This money is the money in your bank account.
Banks create money and lend it to people. So that people enjoy the commercial bank money they lend.
Banks also have the right to give interest on any loans. The bank interest is what makes the bank able to make money.
Those are the four types of money in the world that you need to know. If you have a 1955 double die penny, then you can sell it and get a price according to the condition of your penny.
The money you get from the sale is still included in one of the four types of money in the world.