Currency (n): something that is used as a medium of exchange; money 2) a common article for bartering
The term”currency” is oftentimes used interchangeably with money. Currency is the medium of exchange for goods and services. It is the basis and conduit for conducting trade.
Most countries have a standardized form of currency, such as the U.S. dollar or the Mexican peso. The production and distribution of these currencies are usually handled by state-controlled central banks. However, paper money is by no means the only type of currency.
There are significant efforts to create digital currencies, such as bitcoins and cryptocurrencies, that completely bypass the central banks and transcend international boundaries.
At various times in America, it was accepted practice to use a variety of currencies ranging from furs, pelts, tobacco, gold, and even wampum (a particular type of bead made from shells of certain ocean creatures).
The value of your currency is dictated directly by the desire of the selling party to accept it. Try going to a restaurant tonight and pay your tab with Norwegian kroner or East African shillings. You just might go hungry.
Economists say that the primary driver for the creation of currencies was the Coincidence of Wants Problem. This “Problem” is caused by the improbability of wants and needs of a buyer and seller occurring at the same time and the same place. “I may need your grain in the future, but I just don’t need it right now and I don’t need it here.” Thus, currency solves the Coincidence of Wants Problem as it becomes a massive ledger for past, current, and future transactions in an economy.
To a Wildcatter, the Coincidence of Wants Problem is not actually even a problem at all…it is an opportunity. Knowing the wants and needs of multiple players at the same time is a key component to negotiating and deal making. Navigating these wants and needs of both buyers and sellers is the hallmark of a deal baron.
It’s like playing chess in three dimensions. So many players…so many potential forms of currency. Let the deals begin!!!