Money - It's Nothing but a Record

Money is simple. Don't let them fool you. All money is just a record.

It doesn't matter what kind of money it is. Paper, plastic, computer records, gold coins, US Dollars, Canadian Dollars, Pesos, Pounds, Yen, Euros, due bills, trade dollars, I.O.U.'s, or tally sticks.  Money's purpose is to provide a record that the holder has delivered value to someone, and now holds a claim on value that is available in the whole community that uses that money.

It's an accounting. A way to keep track of who is owed how much. The cash in your wallet is worthless in and of itself. It only serves as a record that society owes you something. It's a promise to pay real value in the form of goods and services.

Since it is trusted to some degree it is easy to find someone who will take it in return for what they have. Then that person has a record that society owes him, and can go get what he wants from the pool of available goods.

For a good crash course on money visit (and read!) Money 2.0.