Meditation on such thoughts has led us to speculate that what we ought to mean by "Currency" ought to be the actual representation, token, symbol, object, service ("or other valuable consideration"?) that is being considered as potentially representative of "Money". At the actual time when it is considered to be or to represent (to "be worth"?) money, one ought to be able to claim that it is, or could be construed as, currently, a form, token, measure, vehicle or representation of money.

Hopefully the above ideas may be of use to you in understanding three types of Currency: Fixed Currency, Floating Currency, and Fiat Currency.

Fixed Currency

Classic "Fixed Currency" amounts to a promise to give the bearer upon demand a fixed quantity of a fixed quality of a fixed commodity.

An online example of a Fixed Currency might be E-Gold, which allows online transactions backed by vaulted gold.

Floating Currency

"Canadian Tire Money" may perhaps be a familiar example of something along the lines of a Floating Currency. Floating Currency promises that given sufficient quantity of it to meet the current prices at the shops/stores that accept that particular Floating Currency, there exists or the promiser intends that there will exist something that such a shop or store is relatively open to exchanging for some of that Floating Currency.

One advantage of Floating Currency over Fixed Currency is that it can sometimes appeal to a wider demographic, due to the fact that different people can readily choose to regard it in their own mind and psychology (where it typically acts as a "secondary reinforcer") as "being" entirely different things.

For example if we created a currency called "SysBucks", and a shop featuring more than one product or service in return for which our "SysBucks" could be redeemed, our "SysBucks" would be a Floating Currency in our terminology.

Whereas if we created a currency called "SysBucks", and a shop featuring only one thing in return for which our "SysBucks" could be redeemed, our "SysBucks" would be a Fixed Currency in our terminology.

One of the disadvantages of Floating Currency compared to Fixed Currency is that the promiser very often reserves the right to change the prices and/or the choices on the menu of things it can be redeemed for. Sometimes the promiser also reserves the right to make such changes without notice. Thus one takes the risk that by the time one actually tries to redeem Floating Currency, it may no longer be redeemable for the quantity, quality or nature of thing that one had in mind at the time that one accepted it.

For example one might agree to accept a specific quantity of Canadian Tire Money because that quantity happens to be the listed price of a certain object that Canadian Tire has offered for sale; only to find upon actually attempting to buy the object that its price has gone up or it is no longer available. With a Fixed Currency that should in theory be less likely to happen, because the object (a bar of gold bullion, for example) promised by the Fixed Currency probably ought to be stashed in a vault or something, held securely to "back" the currency: held in reserve against the time when the currency holder asks for the promised goods or services.

Fiat Currency

Fiat Currency is currency which does not promise a fixed thing for which it can be redeemed and does not even provide a fixed shop, store, market or suchlike providing a variety of redemption options. Instead it is typically foisted off upon the unwary or the downrodden or the hapless masses or other victim(s) as simply "declared by government fiat" to "be money" or to "be of value" or to be "legal tender". Historically, Fiat Currency has often tended to be based upon the threat of armed force. It has thus historically typically been a token whose value is based upon blackmail, coersion, and threat.

For example, some "authority" with the threat of armed force behind its pronouncements (fiats) may simply declare that it is "unlawful" to "operate a public business" unless one agrees to participate in redeeming that "authority"'s Fiat Currency.

Sometimes when the fact that a currency is a Fiat Currency - one not actually based upon actual goods or services deliverable - becomes general knowledge the economy of the company group or region or state or nation or whatever that issued the currency collapses. For example runaway inflation resulting in a wheelbarrow full of "currency" being considered to be "worth less than" a loaf of bread, despite "the authorities'" claims to the contrary.