Krugman, from the textbook:
Economists use the term money in its narrowest sense to refer to cash and bank deposits on which people can write checks. People and firms hold money because it reduces the cost and inconvenience of making transactions.
"Cash and bank deposits on which people can write checks" is M1 money. That's the money I use.
The convenience of making transactions has a lot to do with technology. I was amazed a few years back when the TV commercial showed that you can deposit a check in the bank just by taking a picture of it with your phone. It still amazes me these days, when people at work actually deposit paychecks that way.
I don't do that. I don't live in the future. I prefer to have money in my pocket. Not in a device. I don't buy things on the internet. I don't pay bills on the internet. I don't deposit my paycheck with my phone. I don't have a phone.
The future has increased the convenience of using money. There's no denying that. They make it easy as hell for you to spend money.
Convenience and inconvenience aside, there is the matter of cost: People and firms hold money because it reduces the cost of making transactions.
That's my focus, cost.
Let's look at cost. Let's look at a simple world where there are two places you can keep your money: You can keep it where it earns interest, or you can keep it where it is available for spending. Granted, that distinction has blurred in recent decades because of technology and because of the deregulation of finance and because that is the long-term trend and because this is the future. But if the line blurs so much that you can't tell when you're paying interest and when you're not, things cannot end well.
If we could zero out embedded interest costs, the world would be a better place.