"What is the price of money?" This is no joking question. Money is a measure of the worth of material goods but it in turn has a price, usually an amount of precious metal. Therefore this question may justly be asked and can be answered. At the same time it is possible to shed some light on a few adjoining problems that may have troubled one or the other game-master in the past. I will not fall to the temptation to lecture the esteemed reader on the basics of numismatics and bore him or her to death that way. Instead I will try to answer a few practical questions.

The stuff wealth is made of.

In almost all historic societies - excepting deviant savages who dealt in kauri-mussels and the cacao-bean money of the Aztecs - the basis of historic systems of coinage were three metals: gold, silver and copper. Though historically speaking of no consequence coins minted from other metals like tin or even iron did exist. Copper was usually employed alloyed with tin as bronze while gold and silver where very rarely alloyed into electron. Another alloy one was always likely to encounter was bullion, which is silver plus copper. Bullion though was not a regular part of the canon of metals but a deviation, a symptom of the debasement of the silver coinage it tended to replace.

Throughout pre-modern history the ratio of exchange between the different metals stayed relatively stable between 1:12 and 1:13¾. Thus a piece of gold was worth about thirteen times its weight in silver and so on. For the sake of simplicity most systems of coinage varied the weight of coins of different metals to realign them to a decimal or other system easier to handle than one based on these numbers.

It is this metal equivalent on which I will base all assumptions concerning money in a fantasy roleplaying system. First of all you have a stable relationship between different coins made of different metals. Secondly you have a fixed relationship between money and raw metal either in the shape of bars and nuggets or in the shape of jewelry, artwork or other precious items made from gold or silver.

This was in fact the usual way money matters were handled during most of the Dark Ages and the Middle Ages . Money was only one among a larger number of exchangeable metal items which were used in trade according to their weight. A character from a realistic setting of this era would have carried his wealth in the shape of a collection of coins - various denominations of various realms most likely - a few silver bracelets, a golden earring and a hand full of gems perhaps. If he wanted to pay for something he offered a bracelet and a few coins. The other party would weigh the whole lump of silver and judge its purity. For simplicities sake you may translate the result into a number of coins. A character in a setting like this may actually go along and cut his silver bracelet in half with his sword to pay for a service if he or the other party involved do not have sufficient small change. The artistic worth inherent in a piece of jewelry was not judged very high in most pre-modern societies and it was actually quite common to go to the gold- or silversmith with a piece of jewelry or some coins you owned and to ask him to smelt it and make a new bracelet or earring or what have you out of it. There actually existed so called "pre-monetary units of exchange" i.e. rings, bars, small figurines etc. of a fixed weight which almost took the part of money during most of this era.

What's in a gold-piece?

First of all a gold-piece is an object most people will never see in all their earthly existence. Contrary to what most writers of role-playing systems seem to believe only very few historic countries on a Dark Age or Medieval level of technology ever minted gold coins in sizeable quantities. Most currencies relied on a silver-standard. That means that the unit of measurement of which all coins are only fractions of was a weight in silver, not in gold. Throughout the European Middle Ages there was only one country that kept up the gold standard: The fabulously rich Byzantine Empire. Its gold-coin -the famous "bezant"- was the only gold coin of the Christian world for almost half a millennium. Later it was imitated by its main competitors in the Mediterranean trade: Genoa and Venice, later Florence the commercial and banking centers of the late Middle Ages. Gold coinage was restricted to a few areas of extreme economic preeminence throughout all the following Age of Chivalry - Northern Italy, Flanders and Byzantium.

In the late 13th century many of the nascent European national monarchies - France, England, Castille (Spain) and Norman Sicily tried the change to a gold-based coinage. All attempts were abandoned after only a few years. Only when the Spanish tapped the riches of a whole continent in the 16th century did they start to strike the famous gold-coin of the swashbuckling era: the doubloon. Never the less the standard Spanish currency unit of the era remained the peso, which was a silver coin.
Gold coins were prestige money and trade money for most of the pre-industrial era. So, to keep it simple, have your characters encounter gold coins in transactions where you are likely to encounter 500 Euro bills in a modern setting. Gold coins were for the use of a privileged minority only. This is one reason why they remained rather pure and reliable. If a state had fiscal problems it would simply stop minting gold coins instead of issuing debased ones. Even coins have a reputation to uphold and damaging it by debasing them is a really bad idea.

On the other end of the spectrum, copper coins were not common in the pre-modern economy. During the whole era after the collapse of the Roman Empire any copper coins you may have encountered were very debased silver ones. The smallest silver coins were indeed very small and transactions on a level below the scope of silver coinage were usually made via barter or did not happen at all. Simply forget about copper coins in a Dark Age to Renaissance setting. Most societies simply did not have a demand for small change. Copper coins will only surface in a setting imitating the Ancient World or in a Late Colonial or Industrial context. There they replace the smallest silver coins of the other eras.

Silver coins are the everyday money, the stuff that greases the wheels of the intricate machinery of economy. The average brigand you slaughter will almost certainly carry his unjustly gained wealth in silver, so does the helpful friar you meet on the road or the hardy farmer returning from the market in town.
There are some things you ought to know about silver coinage. First of all, silver was rarely pure. It was almost always bullion, silver alloyed with copper. This had practical reasons. Bullion is more resilient to abrasion than pure silver. But there were also more sinister reasons. The official worth of a coin was its (official) weight in the metal it was made of. The Carolingian silver denier for example - the dominant and for a long time only coin in Dark Age western Europe - weighted about 2 g. 240 deniers made up one Carolingian pound. Thus for a lump of about 480 g of silver which entered the imperial mint at one end, 240 deniers went out at the other end. Wrong! Most likely 260 or 280 deniers left the mint. The additional weight was copper, added to the silver in the process of smelting. The actual silver content of the coin was about 1.7 g. This was common knowledge and it was assumed that the additional coins were in a way the price of the minting or actually a tax on minting coins.
But what if the state was in real trouble and needed money double quick? Suddenly 300, 350, 400 ... deniers per pound left the mint. The rest was made up by adding ever more copper to the silver, the color turning from a silvery white to a blackish brown. That's how pre-modern inflation worked. The state collected the good, old coins trough taxes and fines, smelted them and paid its dues in debased, new coins. This splendid idea worked for some time but it lead to economic collapse in short order. Never the less almost no pre-modern state could resists this temptation for long.

One of the golden rules of numismatics is: Good coins are driven out of circulation by debased coins. The reason behind this is quite simple: People quickly find out that the metal worth of the debased coins is less than that of the good, old ones. Therefor they try to get rid of the bad ones and hoard the good ones. Government in turn will try to get the good coins back to smelt them. This may actually lead to laws demanding payment of taxes and fines in old coinage which in turn has lead to violent upheaval at times and damages the economy because people are reluctant to spend money. Foreign trade will also suffer because merchants from abroad soon find out that the local coinage is worth nothing and prices for imported goods will soar or they will insist on being paid in gold, which is hard to come by. On the other hand this leads to the development that good, old coins are stored away and circulated only when necessary. Thus old coins may remain in use for a very long time stored away in buried pots, dowry caskets and old stockings. This leads to ...

Monetary chaos!

In almost all pre-modern societies a maddening number of different coins circulated. First there were the contemporary regular coins of the realm. Then there were at least three of four generations of older coins of the same realm either purer or more debased than the present coinage - let alone coins minted by subjugated but formerly free principalities, rebellious vassals and unsuccessful pretenders.
Secondly coinage was usually "outsourced" - to use a term presently very en vogue in ecomonist circles. The crown was usually only able to retain the control over gold and some of the silver coinage while small silver in various denominations was coined by feudal and clerical authorities and even by the magistrates of some cities. Under duress or when the power of the king waned, even local guilds, merchant companies or smaller townships minted their own coins. Might makes right, even in the world of coins.
Officially the various contemporary and the different older coins were of the same system of coinage i.e. they had the same name, nominal worth and hopefully metal contents as the contemporary royal ones but people were usually very aware of their real purity and would go to great length not to lose any money by accepting bad change.
Then, almost certainly, there were any number of foreign currencies in circulation. They were either accepted at a fixed ratio of exchange or for their actual weight in metal. Usually one did not change money when entering a foreign country. Foreign money - excepting really exotic currencies - was readily accepted at least by the more urbane and educated population. On the open country people were rather reluctant to accept anything strange though.

The main business of money changers, by the way, was not to change between currencies but between metals. They changed silver coins into gold coins for bigger transactions or gold coins into silver coins for actually spending them. They would also change local coinage into coinage accepted in far away places if you were keen on doing business with the Levant or the barbarians in Muskovite Russia. In most cases the same person was also able to tell you the exact purity of any given coin and sometimes the moneychangers were gold- or silversmiths or jewelers at the same time. In some realms the possession of uncoined gold was forbidden to everyone but goldsmiths. By the way: Usury - lending money with an interest - was not their business but that of the usurer or moneylender. The rate of interest throughout most of the early modern era (1400 to 1700) remained relatively stable at 6% per annum.

The whole chaos had an interesting, secondary effect. There was actually a "free market" for coins. Coins were accepted or refused based on their pureness, reliability or even their nominal - i.e. the amount of "basic" coins they represented. If the royal land-tax was 4 deniers per acre, 4 denier coins were very sought after because they made calculating land tax easy. If it shifted to 6 deniers, there would be a strong demand for 2 denier coins and so on. On the other hand especially well received coins started to circulate far and wide outside the original region where they were minted. The French gros turnoise of 1266 was such an instant success. It circulated through the whole of western Europe and Germany. This leads to a tertiary phenomenon: Lets say country A mints silver coins weighing 2 g and they become increasingly popular in the whole region. Country B on the other hand mints coins weighing 3 g. Exchange between the two systems is hard at first. But very soon country B will start to mint silver coins weighing 6 g which will facilitate exchange or it may actually start to imitate the 2 g coins of the neighboring realm.

For the purpose of roleplaying you have to make a clear decision between realism and simplicity.
If you prefer the latter, forget about all of this. There is one system of coinage in effect, it is made up of lets say three coins (gold piece, silver piece and copper piece if you please, relation 1:10:100) and that's it. It is the same all over the known world. Different countries just put different pictures on their coins and all currencies remain stable and inflation does not exist. In this state of numismatic bliss let you players live their lives unmolested by the realities of economy.
If you vote for the former, you can really vex your players by constantly bombarding them with different coins and the - realistic but sometimes rather boring - business of taking account of 12 different types of the same nominal. But there may be people around who relish this kind of mental acrobatics. It is especially suitable for campaigns involving a lot of travelling and offers the interesting opportunity to lighten your travelling troupe's burden by cunningly employing fluctuations between currencies.

Systems of coinage.

If you randomly ask experienced role-players how large they think their average crown, shilling, Kreuzer or what have you, may be, they will usually trace a circle with a diameter from four centimeters upwards and indicate a thickness worthy of your average plate. Well there were coins of that size. But these were the real big honkers you did not encounter every day. I never found out what engendered this misconception about the size of pre-modern coins but I guess assorted Swashbuckling movies have filled our collective imagination with hoards of coins the size of saucers. The actual dimensions of historic coins in general are far from that assumption though.

Almost all common coins were actually quite small. The Carolingian denier mentioned above has a diameter of about 2 cm. If you assume the diameter of you coins to be between 1.5 and 3.5 cm the average at about 2 cm you are right for most parts of European history. Large coins beyond 3 cm were minted with a purpose, which was usually one of propaganda. Something like "Look at me, I can make my coins way larger than anybody else because I'm so bloody f*king rich!" In this case they could reach a size of up to 4.5 cm. Small, flimsy coins on the other hand were sometimes not bigger than the nail on your little finger. Ancient coins were generally smaller but thicker, often looking more like small chunks of metal than the flat disks we are accustomed to.

Medieval coins were also rather thin. They could be cut in half with a sharp knife - gold and silver being as soft as they are. Only in the renaissance, due to the influx of silver from the New World, did coins become more massive but they still did not surpass a strength of one or two millimeters. 1.5 mm for a renaissance coin is all right. The common coin is also somewhat irregular and no two coins look exactly alike because they are handmade.

The weight of the single coin is almost negligible. On the other hand there were no bills. If you are into experimental archaeology, refuse to accept any bills for about a week and carry your money only in coins and you will understand how it felt like. By the way you will also learn the advantages of a belt pouch and a belt that is not at the same time responsible for keeping up you trousers.
This is a very serious point concerning the well known habit of assorted PCs to haul along whole dragon hoards. I advise to be rather rigid in this respect. If you set up a reasonable system of coinage you will be able to calculate the weight of any number of coins quickly. Almost all roleplaying systems provide rules to handle encumbrance by weight. Do apply them to money too and your characters will soon learn the benefits of a functioning banking system or the light-weight beauty of gemstones.