Limitations: Indivisibility, perishability, tendency to fluctuate erratically and variations in quality are some disadvantages of commodity money. Commodity money is any form of currency that can serve another purpose apart from its use as money.
Advantages: The most important advantage of commodity money is basically that it serves an additional purpose. For example, gold can be turned into jewelry, while cigarettes can be smoked. This gives the holder added options; he can either use or spend the money.