Historically, the concept of money was backed by valuable assets. This is no longer the case, as today we use fiat money: essentially paper with a stamp of a legal authority. However, nothing prevents people from using other commodities as currency. A well-known example occurred during World War II, when cigarettes were widely used as money in prison camps. 

The value of a piece of paper 

Money is therefore any asset that can be used as a store of value, a medium of exchange and a measure of account, but its value depends primarily on the confidence we have that others will respect it. If, for example, I handed over a signed piece of paper instead of money to pay for a coffee, the waiter would not be very happy. However, if I were Tom Cruise, my autograph would be worth much more than that cup of coffee. 

This article was originally published in The Conversation.