on what concepts the monetary sistem is based or rooted?

Well money can be defined as "the commonly accepted medium of exchange."

It used to be there was no money and people traded using barter. For example, if you were a sheep farmer and you wanted pickles, you would go to the market place and hopefully somebody there would be selling pickles. You'd offer him a sheep for a barrel of pickles or something and you'd negotiate until you found a mutually acceptable price, and then you would trade.

There were many problems with the system of barter, though. The major one was something called the "double coincidence of wants." For example, if you were a pickle-wanting sheep-haver, you had to find a sheep-wanting pickle-haver if you were going to make a trade. And it wasn't always likely that you'd find one. So trade under barter was very difficult.

Over time, people discovered that they could get around this problem via something called "indirect exchange." For example, if you were a pickle-wanting sheep-haver, and you were having trouble finding a sheep-wanting pickle-haver, you could look instead for a sheep-wanting gold-haver and trade with him. After that, you would look for a gold-wanting pickle-haver, which might be easier than finding a sheep-wanting pickle-haver.

This is how money was born. Money used to be just another commodity that people would produce and consume for it's own value. But over time they discovered that certain commodities are convenient to trade for not just because it is valuable to you, but because it is valuable to other people and its consequential usefulness in the process of indirect exchange.

Many commodities have been used as money throughout history. In prisons, cigarettes are often used as money. In the not so distant past, gold and silver was used as money throughout much of the world. In colonial times, furs were used as money on the frontier by French and English traders. On the coastal colonies, tobacco warehouse receipts were used as money. There have even been situations where titles to land have been used as money.

Some commodities make better moneys than others. Good moneys tend to have properties like durability, divisibility, homogeneity, availability, and stability in value.

In recent times, however, most of the world has abandoned commodity money and moved on to paper fiat money. Unlike commodity money which is has value in and of itself and is selected by the market, fiat money has worth only because of government legal tender laws. Legal tender laws make it illegal for creditors not to accept this paper money as payments for debt.

Mainstream economists are OK with fiat money and look down upon commodity moneys as old-fashioned and outdated. However, some economists, notably the Austrian School, believe that fiat money is harmful and plays a big role in the business cycle. That is to say, fiat money is partially responsible for depressions and recessions such as the one we are suffering now.

A dollar a coin, is only a promissory note that a person has acrued equal value of a service or product. That you or anyone having it is priomised the equal return.

Interest Rates at which the loan are given and Bought