As I studied economics, I ran across this story a number of times. Perhaps you have heard it. It helps me think about the nature of money and valuation.
The indigenous people on the island of Yap developed money that consisted of enormous round slabs of limestone, up to 12 feet in diameter, with holes in the middle. Limestone was not found on Yap, but on a neighboring island. Quarry and transport costs accentuated its value. Of course, nobody owned very many of these huge stones, called rai, but they did change hands for dowries, or as a last resort after a failed crop (though hopefully your crop was the only one that failed, otherwise you might be facing rai inflation).
But rai did not change hands per se. They were too big. Instead, when you acquired rai, it was merely acknowledged that the stone now belonged to you. You left it in the town square, or marking the path, or wherever it lay. It was yours and everyone knew it. Now you had enduring stored value, ready for you when you needed it.
Once, while transporting a large rai stone, it fell into a deep part of the sea. Oh no! But after some discussion, everyone concluded it must be down there somewhere, and so it continued to be exchanged as if it was regular rai. It is still traded, though nobody has seen it for over 100 years.
It seems to me that the brilliance of modern finance is to say, “Why are we going through the trouble of mining and transporting these stones (or in our case, precious metals) in the first place? Seems like a waste of time. Instead, why don’t we pretend that all our rai are already lying on the bottom of the sea? We’ll just use banks, accountants, and ledgers to keep track of it all, just like we were doing already, but in order to lessen the impact of cycles of inflation and deflation, let’s create a quasi-governmental organization (the Fed) to control how much fictional rai at the bottom of the sea we are allowed to think exists.” Brilliant. If we are all going to play make-believe, we might as well ensure our make-believe world is as stable as possible.