It has value only because we all agree it has value.
Governments create money by issuing dollars.
Banks create money by issuing debt. Most of our money is created this way.
The only way to ever get past the monetary system we have is a situation where money has no value in peoples minds.
Whenever news stories or politicians start talking about the number of dollars, they are (consciously or not) talking away from the represented value. It doesn't matter how many billions or trillions of dollar units are involved, what matters is what those dollars are supposed to represent.
Issues stemming from the existence of money:
There is a perception of the vast majority of people that spending a large sum of money on a policy or an initiative will result in success. Even though we have proven over and over that the management of the resources purchased by the money is far more valuable than the actual expenditure, nobody preceives it that way.
Example: Donald Trump has gone bankrupt (losing other people's money) several times after spending millions on development of buildings. He has also made crapload of money for his investors on other projects.
We make decisions about how important things are to others (individuals and groups) by comparing how much money they spend on one thing to how little they spend on something else. We also use this as a yardstick to judge whether or not other people agree with our opinions. This is a danger because it allows one idea (money) to enter into and distract from every other discussion of ideas.
Example: The belief that buying products made outside of America makes one unpatriotic.
We measure the value of things by comparing how much they cost in dollars to how much other things cost in dollars. This measure of value directs how we spend our money. The idea of getting a bargain will often cause us to spend money on something we would normally save or spend on something else. The danger with this issue is that we are distracted when spending our money, which inevitably leads to a need for more money.
Example: Most Lottery winners are broke within two years of collecting the prize.
We measure the value of people and their ideas by comparing how much money they have and how much money they have 'made' with the fortunes of other people. The danger with this issue is that money distracts us from properly evaluating people's ideas.
Example: Ross Perot was the most successful independent candidate in our lives - people respected him because they judged him to be a success based on how much money he had accumulated. This led to the judgement that he could be a success as President.
The value of money is easily misrepresented. This is a danger because it encourages people to be dishonest with each other when making transactions.
Example: 1000 dollar 'cash back' offers from a car dealership.
The promise of future money can be used in exchange for goods and services in the present. Loans/Credit is dangerous because it artificially accelerates the change in the value of goods and services.
Example: Past, recent, and future housing market bubbles.
Money can be misrepresented as power. This is dangerous because some human beings have proven repeatedly that they are not able to use actual power responsibly. Pretending money is power provides another avenue for us to abuse each other.
Example: Management offers a structured bonus package at the beginning of the year (the carrot), rather than handing out a much earned and unexpected bonus after the good year has been already completed (actual reward).
Is there any reason to address these issues? Well, I can see the upside and the downside of each one of the issues. I think it important and appropriate to articulate the downsides to the money system. In my opinion, there is quite a bit of value (within the system) in limiting the downsides, as well.
I guess the next question would be: Is there any way to actually limit the downside of these issues? I have been reading quite a large array of opinions about whether this is even possible. I believe that this idea of downside limits has been tried many different ways. Some of the downside limiters have met with success others have been an abyssmal failure. Mostly, the success of the limt depends directly on the attitude of the people in the system. Much like confidence in the markets, confidence in the limits on the monetary system depend on whether or not people think they are being successful or are ging to be able to be successful in that environment. If people think they will reach success, they will not try to circumvent the limits and will speak out against or punish others for circumventing the limits. Its because they believe that the limits are contributing to their success. If there is failure or rumor of failure, the limits will be immediatley questioned and changed. At the end of the day people want to be successful and they want the monetary system to work for them.
My gut feeling is that the money system as we have it today will never be able to properly serve the needs of a human being value exchange system and I do not think that the storage and exchange of value between people will ever be served properly by a money system. My simple reasoning is that everytime people try to take their ideas and exchange them through the physical world, there is always distortion. Unfortuantely, we all think our value system is the best and we will never put a larger value on ideas, services, or goods that someone else produces. The milk farmer will always think milk is more valuable than money and the banker will always think the sanctity of money is more valuable than milk.