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Any accepted standard medium of value that facilitates the exchange of goods and services in an economy.


Before money, people used barter to exchange what they had in excess to obtain things that they needed. Finding someone who had what one needed, but also needed what one had in excess, is not the most efficient way to exchange goods. The development of money made it easier to find and obtain the things one needed.

Money is universally recognized, durable, portable, fungible (equal amounts have equal value), is scarce, and has enduring value. Precious metals have fulfilled the role of money for millennia with coins of standard weight and purity. However, coins are heavy and difficult to exchange over long distances and for large purchases, leading to the development of paper money backed by metal deposits.

In modern times, vast quantities of fiat currencies have been created, and most of it simply deposited in accounts electronically rather than being minted. Huge quantities of fiat are exchanged electronically simply by debiting/crediting digitally stored deposit accounts denominated in fiat currencies. The U.S. Dollar, known as the world's "reserve currency", is the most internationally accepted form of fiat money in use today.

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