According to Mankiw, N.G. and Ball, L.M. (2013), In economics money is defined as an asset (a store of value) which functions as a generally accepted medium of exchange, i.e., it can be used directly to buy any good offered for sale in the economy.

Types of Money

1. Fiat money: It has no intrinsic value, Example: the paper money we use

2. Commodity Money: It has intrinsic value, Examples: The gold coins / coins, Cigarettes in prisoners of war concentration camps

3. Digital money

Digital money is any form of payment that exists exclusively in digital form. It is calculated and transferred via computers. it has no tangible nor physocal form, but it is a digital record.

3. Electronic money

E-money is a monetary value that is stored electronically. It is an accepted payment method and is issued upon receipt of funds of equal value.

3. Alternative forms of money

Alternative currency: currency that can be used instead of the dominant national or supranational currency
Examples: The banking system has created various innovations that facilitate transactions such as: credit cards or traveler checks. To the extent that these instruments are generally accepted as means of payment, they constitute money. Furthermore, Miles + Bonus to airlines are considered as alternative type of money. Additionally, companies, individuals,  organizations, local public organizations, etc can create alternative forms of money, for instance a supermarket can – instead of issuing change – give you an indication that they owe 6 Euro. This is an alternative currency. Generally, they have “local” use. Only apply to specific transactions (not accepted by everyone), (Tzagarakis and Daskalou (2015))