Medium of exchange

mediums of exchangeexchange mediumfreely exchangeable for goodsintermediary in exchangemedia of exchangeprimitive moneyusefulnessvehicles of credit
Medium of exchange is one of the three fundamental functions of money in mainstream economics.wikipedia
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Money

monetaryspeciecash
Medium of exchange is one of the three fundamental functions of money in mainstream economics.
The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.

Barter

barter economybarteringbarter trade
Because it can be exchanged for any good or service it acts as an intermediary instrument and avoids the limitations of barter; where what one wants has to be exactly matched with what the other has to offer.
In trade, barter (derived from baretor ) is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.

Representative money

representativecommodity backednegotiated
Most forms of money can act as mediums of exchange including commodity money, representative money and most commonly fiat money.
Representative money is any medium of exchange, often printed on paper, that represents something of value, but has little or no value of its own (intrinsic value).

Commodity money

speciecommoditycommodity standard
Most forms of money can act as mediums of exchange including commodity money, representative money and most commonly fiat money.
Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, tea, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, silk, candy, nails, cocoa beans, cowries and barley.

Fiat money

fiat currencyfiatfiat currencies
Most forms of money can act as mediums of exchange including commodity money, representative money and most commonly fiat money.
Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity).

Currency

currenciesforeign currencycoinage
Although the unit of account must be in some way related to the medium of exchange in use, e.g. coinage should be in denominations of that unit making accounting much easier to perform, it has often been the case that media of exchange have no natural relationship to that unit, and must be 'minted' or in some way marked as having that value.
A currency (from, "in circulation", from currens, -entis), in the most specific sense is money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins.

Store of value

stores of valuea firm foundationput
This relates to another function of money, the store of value. Gold was long popular as a medium of exchange and store of value because it was inert, was convenient to move due to even small amounts of gold having considerable value, and had a constant value.
The other functions are the medium of exchange, which is used as an intermediary to avoid the inconveniences of the coincidence of wants, and the unit of account, which allows the value of various goods, services, assets and liabilities to be rendered in multiples of the same unit.

Chartalism

ChartalistChartalistsModern Monetary Theory
On the other hand, Chartalists claim that the ability to manipulate the value of fiat money is an advantage, in that fiscal stimulus is more easily available in times of economic crisis.
When Knapp was writing, the prevailing view of money was that it had evolved from systems of barter to become a medium of exchange because it represented a durable commodity which had some use value.

Standard of deferred payment

deferred payment periodrepaid
As long as that state produces anything of value to others, its medium of exchange has some value, and its currency may also be useful as a standard of deferred payment among others, even those who never deal with that state directly in foreign exchange.
The other three being medium of exchange, store of value, and unit of account.

Unit of account

money of accountunits of accountaccounting currency
Although the unit of account must be in some way related to the medium of exchange in use, e.g. coinage should be in denominations of that unit making accounting much easier to perform, it has often been the case that media of exchange have no natural relationship to that unit, and must be 'minted' or in some way marked as having that value.

Financial capital

capitalfinance capitalfinancial
Thus it tends to be the medium of exchange function that constrains what can be used as a form of financial capital.

History of money

monetary historyabandonmentan international currency of the early ages
The significant evidence establishes many things were bartered in ancient markets that could be described as a medium of exchange.

William Stanley Jevons

JevonsStanley JevonsWilliam Jevons
William Stanley Jevons described how a widely accepted medium allows each barter exchange to be split into three difficulties of barter.

Coincidence of wants

double coincidence of wants
A medium of exchange eliminates the need for a coincidence of wants.

Interest

simple interestrate of interestinterest rates
When the medium of exchange is scarce, traders will pay to rent it (interest), which acts as an impedance to trade and a net transfer of wealth from poor to rich.

Unit of measurement

unitunits of measurementweights and measures
Fiat currencies' most important and essential function is to provide a 'measure of value'... Hifzur Rab has shown that the market measures or sets the real value of various goods and services using the medium of exchange as unit of measure i.e., standard or the yard stick of measurement of wealth.

Chemically inert

inertinertnesschemical inertness
Gold was long popular as a medium of exchange and store of value because it was inert, was convenient to move due to even small amounts of gold having considerable value, and had a constant value.

Accounting

accountancyaccountantaccounting profession
Although the unit of account must be in some way related to the medium of exchange in use, e.g. coinage should be in denominations of that unit making accounting much easier to perform, it has often been the case that media of exchange have no natural relationship to that unit, and must be 'minted' or in some way marked as having that value.

Commodity

commoditiescommodity pricescommodity good
Also there may be variances in quality of the underlying good which may not have fully agreed commodity grading.

Nicole Oresme

OresmeNicholas OresmeNicolas d'Oresme
It was observed as early as Oresme, Copernicus and then in 1558 by Sir Thomas Gresham, that bad money drives out good in any marketplace (Gresham's Law states "Where legal tender laws exist, bad money drives out good money").

Nicolaus Copernicus

CopernicusCopernicanNicholas Copernicus
It was observed as early as Oresme, Copernicus and then in 1558 by Sir Thomas Gresham, that bad money drives out good in any marketplace (Gresham's Law states "Where legal tender laws exist, bad money drives out good money").

Thomas Gresham

Sir Thomas GreshamThomas
It was observed as early as Oresme, Copernicus and then in 1558 by Sir Thomas Gresham, that bad money drives out good in any marketplace (Gresham's Law states "Where legal tender laws exist, bad money drives out good money").

Gresham's law

Gresham’s Laweconomic theorygood money
It was observed as early as Oresme, Copernicus and then in 1558 by Sir Thomas Gresham, that bad money drives out good in any marketplace (Gresham's Law states "Where legal tender laws exist, bad money drives out good money").

Mint (facility)

mintmintedmints
The fact that a bank or mint has always been able to generate a medium of exchange marked for more units than it is worth as a store of value, is the basis of banking.

Bank

Bankingbankerbanking system
The fact that a bank or mint has always been able to generate a medium of exchange marked for more units than it is worth as a store of value, is the basis of banking.