Money is a tool.

You use money as a tool.

What is money?

Money is a measurement of social favor, and a social favor is an action you perform which another human acknowledges as a benefit.

So, money is a measurement of the actions you perform which other humans acknowledge as a benefit.

Suppose you are in a tribe of humans.

You do a favor for someone else, who on their own behalf, feels an obligation to perform a favor for you in return. Perhaps, the person gives you performs or service or gives you a gift.

Regardless, this obligation has been conceputalized into a measurement as money.

Why do multiple currencies exist?

Multiple currencies exist because multiple communities exist with their own social favor cultures. So, you cannot perform a social favor for someone in a tribe and also measure the favor in a foreign tribe. Instead, you have to find someone in the foreign tribe

• who wants a measurement of social favor from your tribe,
• to exchange
  • your tribe's measurement of social favor
  • for
  • their tribe's measurement of social favor.

So, you cannot perform a social favor for someone in a tribe and also measure the favor in a foreign tribe. Instead, you have to find someone in the foreign tribe

• who wants money from your tribe,
• to exchange
  • your tribe's money
  • for
  • their tribe's money.

This transaction is colloquially called a foreign exchange of currency or forex.

You may need a foreign tribe's currency when you request a favor from a member of the foreign tribe who only accepts the measurement of social favor that their tribe uses. So, this example functions similarly to any video game with a reputation system, where you must earn reputation among the foreign tribe before the person works with you. However, the difference between this reputation and a measurement of social favor is there is a chance another member in that foreign tribe willing to give you their tribe's measurement of social favor in exchange for your tribe's measurement of social favor.

This "measurement of social favor" is money.

How do you use this money as a tool?

You use money as a tool when you use money to help you solve a problem.

Suppose you have a problem.

You can either use a tool such as a hammer to fix the problem or use $25 (i.e. money) to solve the problem.

You do not collect more than one hammer when you are done fixing your problem with a hammer, so you do not collect more than $25 when you are fixing your problem with money. However, there are situations where

• you find 2 hammers while searching for 1 hammer.
• you find $100 while seeking $25.

You can choose to spend your energy managing an excess of tools, where the excess is the tools you do not need.

So, you can choose to spend energy

• to maintain 2 hammers instead of one
• to maintain $100 instead of $0
  when you solved your problem.