Commodity money is a type of currency that is valued for the material it is made from, such as gold coins, where the value of the money is typically the value of the commodity itself, rather than the denomination stamped on it.
A theory in economics that suggests bad money drives out good money from circulation. When two forms of commodity money are in circulation which are accepted by law as having similar face value, the more valuable one will be hoarded and the less valuable one will be spent.
