I’ve always thought of the money in my bank as a numerical value that could easily be changed by adding just one 0 at the end if you know what I mean.
If paper cash has value, then how does the bank transfer the money so that the receiver has value? Do they deliver the paper cash physically after an online transaction? Does the money online have some sort of “token” that gives it value so that it cannot be changed with the click of a button?
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Nope, it’s just bits in a database. In fact, most of the cash in modern economies is just that – purely digital. Most estimates for a modern economy will say that only 10% of all the “money” in the economy is paper. The rest of it is just records in a database somewhere.
It is numbers in a register. Most times Bank A’s customers may send $1,000,000 to customers of bank B while bank B’s customers send $1,000,000 to Bank A’s customers. The banks don’t physically send the cash to each other as I owe you money and you owe me money and they are even.
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