Possible Practices of Currencies: A diversified phenomena

Money

Money in any form must have three attributes that make it acceptable to the public.

i. It must be able to be stored money. For example, a person receives his salary at the beginning of the month, but he may not be willing to spend it that very moment. He may decide to keep the money and use it now and then throughout the month. Or he may be saving that money to buy a house or a farm for and will have to save money for months ahead.

ii. It must be a unit of account. The users must be able to measure the value of different commodities with respect to money. Thus, if a meter of cloth costs 10 units of money, then a ready-made suit of the same material will definitely cost more than those 10 units of money.

iii. It should be an accepted medium of exchange to make it valuable. Every one in the community must accept that money in exchange of goods or service otherwise the money does not fulfill its purpose. Usually the government will issue a legal tender informing the public that the new form of money is to be used from then on. This motivates the public into accepting that currency.

Barter

Not every situation warranted the usage of money in the old days as another form of trade also existed; one that allowed to exchange an article for another one. Hence, a farmer could exchange his wheat for a chicken or a haircut from the barber. This form of trade was known as barter and was fairly common in the old days.