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21 March, 21:33

Why were coins a better form of money than fiat money?

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  1. 22 March, 00:50
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    The value of coins (or commodity money) was based on the material it was made from, like gold, silver, etc. On the other hand, the value of fiat money was based on the relationship between demand and supply. Thus, fiat money's value was not intrinsic and subject to change. It was more prone to inflation. Moreover, it was subject to the public's confidence in the government. If the public's confidence in the government changed, it was enough to render the fiat money worthless. This is why coins were a better form of money than fiat money.
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