Anything that is easily used as a medium of exchange in settling a trade is called money. Earlier demanded commodities like salt, rice wheat, weapons, livestock was used as money, it was called barter exchange. After that metallic money like gold, silver, copper come into existence. They were quiet popular. Soon this money was found inconvenient as well as dangerous to carry, so replaced by paper currency. Every country prints its own fiat currency as per their policy; generally these currencies are printed and controlled by the central bank of that country. After economic revolution paper money is accompanies by credit money, plastic money etc. The latest form of Digital money (bitcoin) gets introduced in the year 2009. Purpose of all forms of money is to make the trade simple and easy.
The first part of your post is not exactly right, you can use almost anything as a medium of exchange as long as the other person accepts it but that doesn't makes it money, money has a set of specific characteristics and it wasn't until gold was converted to coins of the same weight and size when we had money for the first time in history, this is why even if people try to say that bitcoin is not money we can show them they are wrong because bitcoins fits all the characteristics that defines money.