\subsection{Commodity currencies}
The idea of money originated in this era howbeit in a primitive form. In this economy there was some universal equivalent (``used as money'') which was normally another good. This good was …show more content…
In this economy, the Goldsmiths would keep your gold in their vaults and in exchange give you a piece of paper that certified that they owed you a certain amount of gold. This was an assurance to everyone that the bearer (of the paper) had a certain amount of gold in holding and hence the paper could be used to claim the actual gold. Consequently the piece of paper could be used to trade.
With the passage of time, people started to use cheaper metals or pieces of paper that could be exchanged not for their intrinsic value but for the value that was printed on them. In this economy, the token (either a piece of paper or a metallic coin) was not worth much in that it had no intrinsic value, but it was used as ``money'' because it was backed by commodity money (gold or silver) at a fixed exchange rate. Token money would be exchanged with the issuer of the currency; the Goldsmiths. This is how the gold standard came into