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Fiat Gold coins are an example of legal tender that are traded for their intrinsic worth, instead of their stated value. Fiat cash or fiat currency is cash whose value is not stemmed from any intrinsic worth or warranty that it can be transformed into an important commodity (such as gold).

Typically, the government declares the fiat currency (usually notes and coins from a reserve bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it illegal not to accept the fiat currency as a way of repayment for all debts, public and private. Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, nevertheless, they trade based upon the market cost of the metal content as a commodity, instead of their legal tender face value (which is generally just a small portion of their bullion worth).

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However, fiat money has an advantage over representative or product money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat cash) if at least half of the physical note can be rebuilded, or if it can be otherwise shown to have actually been ruined.

Coinage These elements caused the shift of the store of value being the metal itself: initially silver, then both silver and gold, and at one point there was bronze also. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and marked into coins.

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Coins might be counterfeited, but they likewise produced a brand-new system of account, which assisted cause banking.  I Found This Interesting  offered the next link: coins might now be easily tested for their fine weight of the metal, and thus the worth of a coin could be identified, even if it had been shaved, debased or otherwise tampered with (see Numismatics).

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Gold coins were utilized for big purchases, payment of the military, and support of state activities. Silver coins were used for midsized transactions, and as a system of account for taxes, fees, agreements, and fealty, while copper coins represented the coinage of common transaction. This system had been utilized in ancient India considering that the time of the Mahajanapadas.