Principles of Macroeconomics / Unit 11 MAC 1004 short lesson, about 20 seconds
Commodity, Commodity-Backed and Fiat Money
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The idea
Commodity money has other uses, such as gold or silver. Commodity-backed currency is redeemable for such a thing. Fiat money has no intrinsic value and is money by declaration and acceptance.
In practice
A dollar bill calls itself legal tender for all debts, public and private.
Where people slip
Fiat money works on confidence. Cryptocurrency is not central-bank issued, so not fiat.
Your place on the trail
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