This is quite nebulous and difficult to fully comprehend.

Money must have a life cycle of some sort, just zoom out and this is self-evident.  Bitcoin was created, for example, by Satoshi.  New bitcoins are created every day.

If you did your Bill Still video homework he explains all of this in much more detail.

Money has layers. Just like bitcoin.  Most money is created by commercial banks in exchange for a loan agreement.

This money or currency (to Joe Public it's the same) is either fully or fractionally backed.  You would rather full reserve than fractional, but the end user seems to have been conditioned not to care, very much.