One thing crypto has been good for is it made us think critically about why money actually is. It's all a matter of faith and believing someone else will value it in the future...or a military will tell you to value it. Gold has the same issue; its intrinsic value is somewhere around silver or copper.
Once you think about currencies this way, you realize that while crypto could be used as a currency, it isn't; its a speculative investment, like a digital beanie baby.
No, money is suppose to exist as solid green paper. The value is imaginary but its existence is physical.
The bank and government claim that if I want my money they can give me my money in green physical paper bills because it exists in the bank.
Problem is that it's a lie. That's why bank runs are possible. And the current bank runs ends with another institution taking over and articulating the same lie.
There are a lot more bank deposits than green paper.
It's similar to how banknotes originally were 1:1 correlated with physical gold (or whatever) in the vault, then banks realized they could lend out more notes than they have gold in the vault.
Very similar situation with electronic vs paper dollars.
Most bank deposits are created out of thin air by commercial banks when they make loans. There isn't enough paper money to cover all those deposits.
Depositors can be made whole without receiving little green pieces of paper.
Checks, account transfers, wire transfers, etc.
There is no fundamental limit on the Federal Reserve to create (or destroy) money as needed. The Fed, as other central banks, does however exercise that power very judiciously, and with specific targets (inflation, unemployment) as its foundational charter.
Note that both inflation and unemployment are not assessed by the Fed, but by an independent federal department, Labour. It's a classic instance of not giving a single entity control over both the means of control and the measurement of success.
Bank deposits are not all financial wealth, though they're a substantial share of it. Even given that, the facts, from the US Federal Reserve (it runs both FRED and currency.gov), are that there is nearly ten times the amount of financial wealth in bank deposits as there are green pieces of paper representing that wealth.
Federal Reserve Notes are currency used for some forms of financial transactions. They are not equivalent to the total amount of financial wealth, most of which is noted in accounts of various types.
You might also want to familiarise yourself with the various measures of money supply (spoiler: it's not little green men, erm, pieces of paper):
All money has value for one reason: because people think it's valuable. It doesn't matter if it's cigarettes in prison, giant stone discs in Micronesia, or bits on a server owned by your bank.
The value of money is a human construct, much as the meaning of words is.
There's a widespread misperception that money is some physical entity. It is not.
A description I've come to use is that money is the medium of greatest acceptance within a given market or region. Note that money need not be paper notes, coins, or even any sort of government issue. There's an excellent 1945 paper on the economic organisation of a POW camp which describes how an economy based largely on cigarettes and various Red Cross ration items emerged amongst Allied prisoners of Germany during WWII:
In particular, it looks at what problems money can solve (and what happens when there's an insufficient money supply --- in this case, cigarettes), as well as those it cannot (an insufficiency of goods generally to transact).
At various points in time, clams, beaver pelts, cowhides, knives, massive multi-tonne stones (<https://www.npr.org/sections/money/2011/02/15/131934618/the-...>), letters of credit, and cryptographic hashes have served as money. In mediaeval Europe, Roman coins were long used in trade, well after the Roman empire itself had fallen. In parts of the world, US dollars are a preferred currency even outside the 50 states and US territories, with several countries officially adopting the US dollar as their own national currency: <https://www.investopedia.com/articles/forex/040915/countries...>.
William Stanley Jevons defined what to him were the vital set of properties required of money in Money and the Mechanism of Exchange (1877): utility/value, portability, indestructibility, homogeneity, divisibility, stability, cognixability.
I disagree with him on the first property. Money may have an intrinsic value (as with gold or specie), but need not. In particular, the intrinsic value of money is inverse to the trust in the monetary authority itself. That is, in a low trust financial system, money typically consists of or is backed by some physical store of value. In a high trust financial system, currency tokens need have no fundamental utility (as with paper banknotes or digital accounts), but rather there is a trust in the system as a whole to function predictably and reliably.
The value represented by money is one that is socially, legally, and economically recognised. It's ultimately a tokenisation of credit and wealth. It is not directly tied to any physical characteristics (though as a medium of exchange it can be traded for any given physical commodity or service). That's not "imaginary" in the same sense that other social conventions such as which side of the road to drive on are not imaginary. Which side to drive on is entirely arbitrary as an initial social choice, but once that side has been chosen there are very real consequences to flouting the convention.
Even more to the point is how money is a sort of illusion : it's a signal that allows for better allocation of real (and imaginary) resources in the economy.
A name is a imaginary representation, this is different from a factual claim about reality.