What is money?

What is money?

Money is a medium of exchange. We trade our time at a job, say, for money and then trade the money for groceries and rent. Paper money has no intrinsic value. It makes poor note paper. It isn't much use in an outhouse. But it is very useful in allowing us to earn here and spend there.
Many things have been used for money: shells, tobacco, huge stones in Micronesia, precious metals, and not so precious metals like lead and copper. Gold and silver have been the most durable monies. It is said that an ounce of gold has always been enough to pay for a suit in London. The suit was better in some centuries than others, but at least you could wear it.
The important point is that money is only worth what it can buy (can be exchanged for) in the present. A money's purchasing power can change drastically overnight or stay stable for long periods. In the United States, a bushel of corn was the same price in 1900 as in 1800. During the next century, the dollar lost 95% of its purchasing power; a nickel in 1900 bought what a dollar did in 2000.
Money can do so much for us that it is easy to think of it as an end in itself, as something reliable and enduring. It isn't. Money is slippery stuff.
Occasionally, a currency appreciates (the yen buys more in Japan in 2003 than it did ten years earlier) but this is usually short lived. In the long run, currencies tend to depreciate until they are worthless.