Commodity money

Examples of commodities that have been used as media of exchange include precious metals and stones, grain, animal parts (such as beaver pelts), tobacco, fuel, and others.

A key feature of commodity money is that the value is directly perceived by its users, who recognize the utility or beauty of the tokens as goods in themselves.

In another example, in US prisons after smoking was banned circa 2003, commodity money has switched in many places to containers of mackerel fish fillets, which have a fairly standard cost and are easy to store.

Various commodities were used in pre-Revolutionary America including wampum (shell beads), maize (corn), iron nails, beaver pelts, and tobacco.

Cigarettes and gasoline were used as a form of commodity money in some parts of Europe, including Germany, France and Belgium, in the immediate aftermath of World War II.

[6] They have continued to be used as currency in war-torn locations experiencing inadequate supply of common goods and monetary collapse, such as during the Siege of Sarajevo in 1993[7] or in Russian-occupied Kherson in 2022.

[8] Although grains such as barley have been used historically in relations of trade and barter (Mesopotamia circa 3000 BC), they can be inconvenient as a medium of exchange or a standard of deferred payment due to transport and storage concerns and eventual spoilage.

[citation needed] To organize production and to distribute goods and services among their populations, before market economies existed, people relied on tradition, top-down command, or community cooperation.

[9] Several centuries after the invention of cuneiform script, the use of writing expanded beyond debt/payment certificates and inventory lists to codified amounts of commodity money being used in contract law, such as buying property and paying legal fines.