Commodity Money

Commodity money is a type of currency that derives its value from the material it's made of, such as gold, silver, or other valuable commodities. Unlike paper money or digital currency, which are backed by government guarantees, commodity money has intrinsic worth because of the material’s inherent value. Historically, societies used commodity money because it was widely accepted for trade and had tangible worth. Its value is based on the commodity’s scarcity and desirability, making it a reliable medium of exchange and store of value without relying on external backing like a government or bank.