Token money, or token, is a form of money that has a lesser intrinsic value compared to its face value.[1][2] Token money is anything that is accepted as money, not due to its intrinsic value but instead because of custom or legal enactment.[3] Token money costs less to produce than its face value.[3] A banknote, e.g. a five-pound note, is token money because despite its value being 5 pounds it only costs significantly less to produce.[3] A gold coin is not considered token money.[3] The token money system has been adopted in many businesses around the world as an effective way to exchange value between companies and customers.[4] Token money as a system is predominantly used in mobile games, but is also used in the realm of e-commerce.[4] Token money is similar to fiat money which also has little intrinsic value, however they differ in that token money is a limited legal tender.[5] The adoption of token money has improved transaction efficiency, as the practicalty of transacting with sums of gold poses a larger security risk. In a commodity economy, money is a measure of the value of goods and services (prices) within a sovereign country or the same economy, as well as a particular commodity to pay off debts.[6] The token is also used as a medium of exchange, as a store of value, and as a unit of account. Digital currencies using decentralized blockchaintechnology are also a form of token money.[7]
