Commodity money coins. Commodity money Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects that have value in themselves (intrinsic value) as well as value in their use as money. Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, tea, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, silk, candy, nails, cocoa beans, cowries and barley. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system
Commodity value historical relevance when analyzed in light of Gresham's Law. Because money becomes valuable not due to its substance, that is, its commodity value, but rather because of its performance, currencies tend to become token. Asset backed debt has a commodity value equal to the price of the collateral; a loan backed by a house has a commodity value equal to the free market price of the house. Non-collateralized debt, on the other hand, does not have a commodity value; it is valuable only insofar as it is repaid. Commodity value is an important consideration in hedging against inflation. Whereas fiat