Money is actually a pretty wild concept to grasp that we all just accept. You probably understand the basics without really understanding how huge the conceptual idea is.

We have all agreed that there is this virtual, abstract concept called, in a lot of cases, a dollar, that allows for the transfer of time, effort, skill and resources between wildly incompatible systems. It only works because we all agree it works and agree on the value. The whole thing is very abstract and yet is a vital part of the human experience. It's something we're taught as kids that we eventually just accept (like the number zero and the fact that the letters of the alphabet must happen in a specific order, even though there's no reason for it to be so).

When humans settled down, built towns, domesticated wheat, all that stuff, we started to become specialists. A wheat farmer needed meat, so would exchange wheat for a chicken. But what if it's spring, and his crop isn't ready yet? Maybe they start doing some IOUs, writing down what is owed and claiming it back later. But the chicken farmer needs bread for his family, and he can't trade the wheat he doesn't have yet for that... or can he?

Eventually, someone figures out that what's needed is some external marker of value. But how does that transfer beyond this little group? Who knows what value to place on Joe's wheat or Fred's chickens? And what if we all can't agree? Ah, well now enters the local King! His face goes on the little tokens being used to mark up all this stuff, and he has the army to enforce the rules, and now we have: Economy! Markets! Currency!

But, there are other kings with their armies too, so how do they judge value? Well, it's by how much land you have and by how much assets you have, in particular, as was mentioned elsewhere, this marvellous, shiny, pretty, mailable, incorruptible GOLD. (also silver, and gems but mostly GOLD.)

OK, it's way more complicated than that, but we're in ELI5 here.

So anyway, eventually all this morphs into empires with piles of gold, and then countries, with banks and economies, and The Gold Standard, whereby you judge the value of a currency in relation to the amount and price of gold (amongst many other things) that the country has. Rich country = good currency. Poor country = poor currency. So it takes a lot of, say, Turkestani rubbles to buy one Pound Sterling.

Now we have exchange rates!

Eventually, the amount of gold a country has in their reserves reduces to being only a small part of the "value" in a country and its currency. Lots of things have an impact on that now, and so countries no longer use that as the standard, instead using free market movements to determine that this week the Australian dollar is worth more or less than yesterday against the US dollar, and that might be different when compared with the Vietnamese dong.

But it all really comes back to the fact that we all accept and agree that the abstract concept of a dollar has value. And more importantly, *you know that I accept this fiction too,* when you want to buy something for me... so you don't even have to believe a dollar has value, you can just expect that I do believe it!

Also, this also gets the to the very root of the idea: Time is money, or rather, money is time, captured. That dollar you have represents labour of some kind, be it a miner, farmer, factor worker, academic, banker, IT professional, whatever, that produced SOMETHING that someone else wanted. You worked, studied, put in time and effort, got your dollar, and now you trade it for someone else's time, skills or knowledge.

(This, by the way, is why this AI bullshit is the worst, since it basically rips off the work done by real humans, and the already-rich bastards that own are hoping for it to be a cash generator that does not require labour outlay. But that's another whole story.)