Most everyone basically believes that dollar bills are money, and thus those dollars bills essentially represent a form of currency. The thing about dollar bills, or credits of those dollar bills so held in bank accounts and the like, is that the worth of those dollar bills has an awful lot to do with the credibility so given to those dollars by the individuals and enterprises that we exchange money with on a daily basis. In other words, the stability of a dollar bill, or the lack, thereof, really comes down to the confidence that the recipient has that the dollar bill represents a form of currency that has some implicit stability and thereby universal value to it that is generally accepted by all; and of which, when that perception by a meaningful percentage of people and enterprises thereby changes, the value of that paper money has a strong tendency to depreciate, thereby producing inflation.
The thing about electronic deposits of dollar bills or even the physical dollar bills in a given person’s pocket is that in short, those dollar bills, are pretty much well designed pieces of paper or digital entries, that have no utility to them, other than the full faith and confidence of that government that supports such. That is to say, Monopoly™ money has no intrinsic value, whatsoever, because nobody is credulous enough to believe that Monopoly™ money has monetary value to it. So then, basically the only reason why dollar bills are accorded a high degree of credibility is not only the universality of those dollar bills, but the fact that the government will do its level best to support the dollar, because it understands that a dollar that has lost all credibility, will for a certainty inevitably create an extreme economic crisis.
Many a country, even a well-established country, has issued paper currency, only to have such, through sustained inflation over some period of time, along with national debts that cannot be properly serviced, or via outright national fraud, thereby suffered the indignity of that money, becoming severely depreciated vis-à-vis other sound currencies, thereby leading to the actual default on such, completely, to the ruin of those that have assets in that paper currency. That is to say, having paper wealth, while seeming to be of value to a given individual or enterprise, does have a potential downside, and that downside is that paper wealth, is susceptible to its value being depreciated precipitously through inflation or default, catastrophic or not.
The main purpose of paper money is its value as a universal medium of exchange, so that trading and selling can more easily be accomplished between parties; and thereby the good governance of a given country, is to the degree so possible, to provide intrinsic stability to that paper currency; for real money is never that which is held on paper, or electronic credits of such in a bank; but rather real money represents that which has a call upon real assets, such as a home, a business enterprise, a vehicle, or a stock certificate, and basically all that which is tangible and has utility in and of itself – whereas paper money has, at best, only a derivative value, based upon confidence, and no more than that.