Money as a Commodity versus Money as a Pact

Since the dawn of history there are two entirely different philosophies behind the money with intrinsic value and the currency without intrinsic value.

Money with intrinsic value is treated as a commodity: both to earn it and to create it you have to produce and give purchasing power in exchange for it, because of its intrinsic value and production cost. It could be said that it seems almost spontaneously evolved: the intrinsic value is always present, and just moves from goods to reference goods to money. The question is: how come that people begun to consider that money had that intrinsic value?

Currency without intrinsic value is totally based on agreement, on confidence. It does not have value, it represents value: we all agree to use it so, whether willing or forced to. And it costs nothing to produce, too. In actual fact, if you set aside all the deliberate and interested confusions, lies, omissions and just look what's there, it is easily observable that its purchasing power suddenly and arbitrarily comes into being the first time it gets exchanged with other purchasing power. This type of money was the result of human brilliance applied, and it's just as old as the other: it was already conceived by Aristotle and called Numisma, and this word derived from Nomos, that means Law, because its existence and use is an act of willingness and agreement, thus ratified as such within the Law. The question is: who is the owner of currency when it gets born, who is the owner of its purchasing power when its purchasing power gets born?

For a better insight into the difference between the two types, let's return to Example Island and do an inventory of the wealth existing on the island; as money exists to serve as a unit of account, we will use it as such.