Personal possession of currency is prohibited in U. S. prisons, although, in practice, prisoners still exchange goods and services. American prisoners used cigarettes as a medium of exchange until smoking was banned in U. S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wall Street Journal reported that energy bars had caught on as money in some American prisons. Outside of U. S. prisons, people use the U. S. dollar for day-to-day transactions. One important difference between using energy bars and using dollars as money is that have intrinsic value. U. S. dollars are an example of money.

One important difference between using energy bars and using dollars as money is that ENERGY BARS have intrinsic value. U.S. dollars are an example of FIAT money.

Explanation:

Energy bars have intrinsic value and therefore present a type of commodity inside the jail. This is called commodity money because energy bars have value besides the value assigned by the prisoners. They serve as a medium of exchange but they can also be eaten.

On the other hand, fiat money or official currency has value because the government backs it. For example, the US dollar has value because the US government stands behind them: "This note is legal tender for all debts, public and private." US dollars can only be used as money, since they cannot be eaten like energy bars or traded for another use besides being money.