Interesting. I love finance.
Currency has value because governments say it does...
On a side note it will be interesting when the dollar is no longer the worlds reserve currency... America will no longer be able to be "the bank in monopoly" and it will have to play by the same rules as everyone else.
Indeed, changing the world reserve currency will be interesting. :)
I would say that currency has value because it's incredibly useful in economies of scale (when we can no longer keep track of everyone by reputation alone); what governments tend to do is threaten to hurt people who don't use their preferred substance as currency. So it's not that currency has value because governments say it does, but that governments use threats and force to control which currency people make valuable.
I'm planning a future video which addresses what makes one currency valuable as opposed to another, when both meet the criteria outlined in this video.
I believe that gold for example is listed as an official currency by some state governments, yet if I went to pay for my groceries in grams of gold that would be a no go.... is that a business decision on the store's part or why is it that gold is not used in transactions even if you want to?