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The four primary characteristics of money are: (1) durability, (2) divisibility, (3) transportability, and (4) noncounterfeitability. : (1), , (2) , (3) , (4) noncounterfeitability. Although a number of items or assets have served as money, those that best match these four characteristics are the ones that best function as money, the ones that best operate as a medium of exchange. , , , , , , .

Almost any item, any asset, any "thing" can function as money so long as it is generally accepted as payment. , , "" , , , . In fact, a lot of different "things" have been used as money over the centuries--gold, silver, copper, nickel, animal skins, chocolate bars, cigarettes, precious gems, semi-precious gems, really precious gems, and assorted food products. , "" - , , , , , , , , , , , .

While a number of "things" have been used as money, some have worked better than others. "" , , . Those "things" that did not work so well were replaced by other "things" that worked better. "", , "", . Those "things" that worked best tended to have four basic characteristics: (1) durability, (2) divisibility, (3) transportability, and (4) noncounterfeitability. "", , : (1), , (2) , (3) , (4) noncounterfeitability.

Durability

This first characteristic means that an item retains the same shape, form, and substance over an extended period of time; that it does not easily decompose, deteriorate, degrade, or otherwise change form. , , , , , , , . However, durability also extends beyond the physical realm to include social and institutional durability. , , .

Durability is critical for money to perform the related functions of medium of exchange and store of value.

Divisibility

This second characteristic means money can be divided into small increments that can be used in exchange for goods of varying values. , . For an item to function as THE medium of exchange, which can be used to purchase a wide range of different goods with a wide range of different values, then it must be divisible. , , . The smaller the divisions, the better. , . For an item to function as THE medium of exchange it must have increments that allow it to be traded for both battleships and bubble gum, and everything in between. , , , .

Divisibility is one reason why metals, such as gold, silver, copper, and nickel, have been widely used as money throughout history. , , , , , . As pure elements, each can be divided into really, really small units, in principle, down to the molecular level. , , , , . In contrast, livestock, which has seen limited use as money in less sophisticated agrarian societies, never become widely used as money in modern economies. , , . Dividing live water buffalo into increments small enough to buy bubble gum is highly impractical. , .





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