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Alternate Forms of Fantasy Currency

Started by Porklet, March 14, 2009, 04:13:32 PM

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Porklet

I have been thinking about including currency in my TL4 fantasy setting that is not made out of precious metals.  I am doing this mostly to add flavor to the world, and, in one case, provide a viable currency for a race where mining does not exist.  Paper, or parchment, currency would be nearly impossible to produce in substantial numbers, but I have toyed with the idea of having documents with an official Treasurer's Seal acting as a "check".  Other materials under consideration are coral, wood, and crafted stone.

The main concerns I have are counterfeiting and how feasible these types of currency would be.  Some methods of combatting counterfeiting is magic auras (although this might be a bit difficult for the layman peddler with no Magery), stamped seals, intricate carvings (for higher denominations).

Some ideas:

A living wood coin that has a thin moss film on it.  To test whether the coin was legitimate you swipe off the moss, and if it grows back within a few seconds then it is a real coin.  This type of currency is probably cost prohibitive.

A specific type of coral, with unique color patterns, carved into a coin.


Any ideas or critiques are welcome.  Again, this if for flavor, but I want it to be believable and feasible.  Any thoughts?

LD

Certain types of Shells?

or GIANT STONE WHEELS. (Somewhat difficult to counterfeit; takes time an energy to carve them. And they can be used as building foundations.)

or Dead animal bones- specific bones, like the horns of unicorns?

or Teeth of certain animals- important livestock. The more teeth you have, the bigger your contribution to the community. Thus, in this community the shepherds and livestock owners would be rulers- thereby demonstrating a strong shift away from hunter/gathering.

Superfluous Crow

Something that could be cool would be liquid coinage. Maybe merchants have a special vial that changes color if the liquid is sanctioned. But might be easy to counterfeit...
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LD

That's a pretty neat idea, Cataclysmic Crow.

If they have PH meters, they could have liquids of certain acidities worth differing amounts.

Matt Larkin (author)

The thing about coral or wood as currency, is that it has to be representative of something with more real value, like the paper used to represent gold.

I don't know about a culture without mining (maybe barter), but crystals, gems, especially diamonds, and other hard materials could work. Also, livestock.
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Ghostman

Didn't the Mesoamerican peoples use cocoa beans as currency? Whether it's true or not, I love the idea. Drinking chocolate would literally be drinking money...
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Ra-Tiel

Depending on how much your world is into blood-magic: blood would work pretty well as a currency. Payment would be a small self-inflicted cut with the blood being spilled in specifically enchanted vials that measure the value of the blood and protect its magical properties.

Would be compatible with Cataclysmic Crow's idea of liquid money.

Stargate525

Well, food was always a staple, as well as spices. Several types of spice in Medieval ages were several times more precious than gold.

Labor would be an interesting, if logistically difficult, way to go. You write checks for an hour (minute, day, seconds) of your time performing a particular skill at some level. Good are worth the amount of energy put into them, and services are based on a mixture of the time and the skill required to perform them.

In desert climates, you can have a water-based economy. Quality control would be easier to do, though regulation would be difficult to do.
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LordVreeg

[blockquote=Porklet]The main concerns I have are counterfeiting and how feasible these types of currency would be. Some methods of combatting counterfeiting is magic auras (although this might be a bit difficult for the layman peddler with no Magery), stamped seals, intricate carvings (for higher denominations).[/blockquote]
Much as moneychangers had to have officially checked scales in exchange-based currencies, I would imagine that there would be an official in the town would should be able to check for veracity, even in a small village.

Love the blood idea, though the inflation after a war might be a little much to take, though I can see the blood and the container being needed (so that the check on inflation would be the special vials).


I also like salt as a currency.
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Xeviat

Salt and other spices are good ideas, but then the state would own all of the production of such spices. If cocoa was a currency, for instance, only the state would be allowed to grow the trees and anyone caught planting one on their land would face stiff punishment.

The only thing I find odd about precious metal currency is that it has no value aside from its aesthetic properties. Now a days we make gold wiring, but I don't think people back in the day were melting coins down into anything "useful"; it was just for jewelry and what-not.

Heck, our paper money in America isn't even backed by gold anymore. It's just backed by the assurance that the government will trade goods and services for it, so we trade goods and services for it. In a suitably advanced society, "worthless" money could work as long as it was difficult to counterfeit; it could have started with paper IOUs being given out amongst the wealthy, and eventually the IOUs started being traded beyond the initial recipients.

Heck, I think the Templars did banking like that, where you'd give your money to a Templar bank in your homeland and then when you got to Israel you'd turn in the receipt and get your money back (minus a fee). So it's not too outlandish for Medieval era thinking.
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SDragon

If you're going with a representative coinage, don't worry too much about cost efficiency. Circulation multiplies face value; a $1USD bill buys $1USD worth of goods each time it's used, so after being used 50 times, it's purchased a total of $50USD worth of goods. Really, your biggest concern here is preventing forgery.


If you're not going with a representative coinage, then you need something of real, practical value. In this sort of structure, potatoes would be worth much more then their weight in gold. Unfortunately, it's harder to standardize this sort of system. Even if everybody had equal needs for both potatoes and, say, bananas, some people might simply prefer bananas over potatoes. To those people, the bananas are worth more then the potatoes, even if both satisfy needs equally.
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Stargate525

Agreed that the main problem is that with currencies of any practical value, the government cannot have a reasonable monopoly on the item. It's far easier to 'counterfeit,' for example, a bunch of bananas from an illegal grove than perfectly reproduce a coin.

And there's no huge reason for a system like this to simply be a barter economy by which one major trade good is the most common.
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Xeviat

Yeah, barter is probably your best bet if you don't want coins. Then again, sea shells work, especially if they're made into beads. I like precious beads as an idea, and people's wallets are a leather string for stringing their beads.
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Porklet

It's not that I don't want coins.  It's that I don't want coins made of precious metals, or coins made of something with an intristic value.

I like a lot of the ideas, and I appreciate the feedback.  The liquid-based currency is interesting.  I am a little concerned how it can be physically managed. Vials, barrels, and wineskins might do.  I don't think any group of adventurers is going to be particularly moved by the sight of a dragon lying on a huge bed of wineskins (although the dragon would be infinitely more comfortable).  However, I do have a nation that would prize water.

I am also intrigued by the idea of citizens being able to "wear" their wealth around their neck, i.e. a string of beads.  Those beads could be coral, shell, pearls, etc.

One of the major pitfalls I have considered is international trade and exchange rates.  Would this be better handled by an international merchant's guild?  There was an empire, dead for nearly 50 years, but their currency was imperial coin of gold and silver.  There is an alliance of a handful of nations, but they certainly don't speak for the rest of the world.  Or maybe I don't need a standard exchange rate.

Garanth

There's two different types of currency, fiat money and commodity money.

Bartering: The most primitive society will have a barter system. This system is very simple, but is has drastic efficiency concerns due to its reliance on a double coincidence of wants (both barterers must have something the other wants, or no trade will take place). A small economy, such as small villages or communes, will likely rely on barter economies. Also, should the government backing a fiat currency collapse or appear to collapse, most economies will fall back on barter in the absence of a reliable currency substitute.

-primitive
-reliable (doesn't depend on stability)
-inefficient (takes time, both parties must have something to trade that other deems valuable)

Commodity money: such as aforementioned metal, food, or spice currencies, is the slightly more advanced version of bartering. To escape reliance on double-coincidence of wants, an economy switches to a widely available, highly demanded, and standardly measured commodity. Basically this simply adds an extra step the classic barter transaction, where instead of trading for something that you directly need you trade it for something that you can assuredly trade in the future for something you need.
This type of currency allows societies to become more complex, and makes it easier for support professions (priests, lawyers, etc) to exist.
Historically, commodity money has ranged from metals (iron, copper, gold, silver) to precious stones, to spices (notably salt). Some (typically nomadic) cultures also used horses in a sort of hybrid barter-commodity currency system. Another example would be cigarettes in prisons. It is inefficient because a large amount of a useful commodity is tied up acting as a currency. It also ties the supply of money (and thus the value of it) to the supply of the commodity. If an infinite source of gold was found, the value of gold would immediately plummet and gold currencies would become worthless.

Commodity currencies also require some means for measuring it. Typically, this would be with a standard size (volume) or weight. A standard size would be a coin, but these coins were subject to having their edges shaved down, or could be forged with a mixture of cheaper metals. Standard weights are more exact, but rely on measuring weight (clumsy and thus inefficient), and could also be distorted with cheaper metals.

-more efficient than barter (but less than fiat)
-reliable (again, no reliance on stability)
-relies on ability to measure (which can be time consuming or inexact)
-money supply depends on supply of commodity (not controlled by gov't, can lead to inflation)


Fiat Currency: is also called a "representative currency," since rather than using a currency that has its own inherent value, you use one that simply represents something of value (or the promise of value). Should the society become sufficiently advanced and stable, a government can issue a currency in the form of something that is worthless in and of itself (such as paper money), and back it with the promise that it can be redeemed for something of value. All that really matters is that other people in the economy are willing to take that currency in exchange for goods and services. If everyone believes that everyone else will continue to accept that currency in exchange for goods and services tomorrow, then they will be willing to accept said currency as payment today.

The most important aspect of any form of currency is that it is accepted in exchange for goods and services, and can serve as a store of value. You could horde gold under your mattress, or paper dollars, or even salt, and have it remain valuable in a week. An apple, however, will not.

Forgery is still a problem, but control over the currency is still much more in the hands of the issuing party than with commodity money. Note that "IOU" currencies are a form of fiat currency.

-most efficient
-most sophisticated
-requires stability (if a country is on the verge of collapse, fears that its currency will no longer be accepted will erode its value)



Hoped that was of some help, and wasn't too long and dry. I can clarify anything I wrote if anybody has trouble with all the econ-speak :P, unfortunately its a hazard that comes with my major.
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