Movie: The Essence of Money, a Medieval Tale(7:36)
Market money was created from merchant IOU's, dependable promises of merchandise or services direct from the suppliers of that merchandise or service. Credits for products and services were denominated in coin value as the measuring unit that everyone understood and in which prices were already set.
This simple invention freed the markets from the tyranny of the "quantity and ownership of money" because anyone selling something in reliable demand could spend their credits in advance of selling their products. These coin-denominated credits could circulate among third parties as if they were coins, facilitating any number of trades, until finally redeemed for the product or service promised by its Issuer.
The silver coin as the commonly understood and agreed upon unit of value was essential to the system, but the actual silver coins were not. The potential quantity of silver-denominated IOU's was only limited by the actual production, trust and demand that gave them value.
The Essence of Money is the short that precedes Money as Debt III - Evolution Beyond Money, a detailed proposal of how the same abundance model of money, which I now like to call Producer Credits, could be applied today to create a truly liberated global money system.
Clearly the concept is not new, and in fact it has always been with us. According to the report linked to below, it is estimated that at least 20% of world trade is currently carried out using business-to-business barter or as the report refers to them, "capacity credits". This report is a valuable read. The banks are being advised to get into the Producer Credit brokerage business as the authors believe this to be the liquidity of the future.
The short cartoon linked to below explains the differences between bank credit, mutual credit (like LETS systems) and Producer Credits.