There are two big ideas of how we started using money. One: money started as a solution to problems with barter between people who had to trade. Two: money was created by governments to settle debts. Who’s right, and who cares?
The gold standard is when a currency is either literally made out of gold, or can be exchanged directly for a set amount of gold. Money can either be commodity money—which is a physical thing that would be valuable even if it weren’t money—or fiat money—something like paper that is only valuable because it has been stamped as money. Today basically all money is fiat money, but historically, commodity money has been much more popular.
Digital money is money we experience not as a physical object, but as a number on a screen in a savings or checking account. Money has almost always existed simply in the form of accounts or credit—information about the amount someone is owed or owes rather than a set of physical things they hold. But today’s digital money has still brought about some pretty important changes in our economies.
A currency is just a type of money that is accepted in a certain area. What we use day to day is never just ‘money’—it’s always in a currency of some kind. Usually, countries create currencies, but there are a growing number of examples of currencies not issued by national governments.
