An example of commodity money is silver. Commodity money is a type of money that has intrinsic value because it is made of a valuable commodity, such as silver or gold. In the past, people used to directly trade goods with each other, but it was not always convenient or practical to carry around large amounts of goods. So, they started using valuable commodities like silver as a medium of exchange.
Silver has its own value because it can be used for various purposes, such as making jewelry or conducting electricity. People recognized this value and agreed to accept silver as a form of payment. They could trade their goods or services for silver, and then use that silver to acquire other goods or services from someone else.
Unlike other forms of money mentioned, such as currency notes, mobile money, or cheques, silver has inherent value in itself. It is a tangible object that holds worth regardless of any government or financial system. Its value is based on the scarcity and demand for silver in various industries.
So, when we talk about commodity money, we mean using a physical item like silver as a medium of exchange because of its inherent value. It was an early form of money that helped facilitate trade and exchange between people in a simple and understandable way.