[magicsmoke]

Paper currency is backed by the fact that you have to pay taxes in it. On tax day when the tax collector comes around with his security escort, you better have something ready if you don't want to end up in jail and your property confiscated. In the old days you paid taxes with a part of your harvest or with gold you got from selling your harvest at the market. Somewhere along the way governments figured they could play all sorts of economic games if they collected taxes using fiat paper instead. They print paper and pay their soldiers with it, you sell your harvest to the soldiers, and the soldiers come around once a year to collect the paper.

Notice how this entire system depends on the government's monopoly on violence. The real modern delusion is the many layers of indirection that insulate us from the real source of power in the natural world. Whether the thing that has value is gold, silver, paper, or bottlecaps doesn't matter. What matters is that the one holding the guns says it has value.