Bitcoin and some metals HAVE intrinsic value! Paper does not

[NotATether]

EDIT: Bitcoin actually has no intrinsic value (see this post for clarification of incorrect information in this post).
I will leave the original post up in case anyone is interested in reading it.
Original post is below:

What is intrinsic value

Intrinsic value of a physical material, gem, metal, coin or digital coin can be defined as 1) how precious it is and 2) how much people are trading with it. The word "precious" is also subjective and has different interpretations, but you can quantify preciousness, at least for physical items, by how attractive something looks. Diamond can be cut at a certain angle to make a gem that gives off brilliant colors, and also it can be cut in different symmetries, the more aligned they are give them a higher value. The same can be said for other gems. Gold, and some other precious metals like platinum, aren't reactive as other metals and withstand corrosion from many acids, and is also extremely malleable.

Many people argue that bitcoin has no value because it exists digitally and has no physical form. If that argument was true then virtual collectables in video games wouldn't have any intrinsic value either but yet we see people selling and trading Counter Strike and Fortnite skins which also don't exist physically.

Intrinsic value is determined by scarcity

The more rare a precious item is, the greater its value. Something that is not precious, like paper, has no value even if it's available in abundance. According to wikipedia there are more than 190,000 tons of gold above the ground, which fits in a 21 meter cube. That's about the size of a large ballroom so imagine that but full of gold, it has a value of around $8.9 trillion. Some gems can only be found in certain parts of the world where conditions are favorable for their creation and that contributes to their scarcity.

Bitcoin is limited in supply to 21 million coins, and rarity is simulated by mining less and less bitcoin. Multiply that by $9500 and you get around $200 billion and since bitcoin is still in it's early stages of adoption I expect its value to eventually increase to that of gold, by the time the halving processes are done.

In all three of these cases, they have one thing in common.

They were created at one point

Naturally, all of these precious goods had to come into existence somehow. Gems are made by metamorphism where rocks are smashed against each other with lots of heat and pressure, under the ground by the earth [Source]. Gold was made in the collision of stars and supernova [Source]. The first bitcoins were made by Satoshi and OG bitcoiners mining the first several blocks.

You could consider all of these items to be worthless immediately after their creation because no one was there to use them! As time passed and people found them they became more valuable, because people attached value to them, not the objects to themselves. So although the objects are always precious, they don't have a trading value until people assign it to them by trading with it.

Which brings me to:

Paper money has no intrinsic value

Paper money is not made from wood pulp, which itself can be made in large batches on demand due to the abundance of trees, it's made from 75% cotton and 25% linen. But even this can be manufactured en masse and thus has no intrinsic value. Anything that can be manufactured in large quantities on demand has little to no intrinsic value simply because of the sheer number of units in circulation.

What gives paper money its value is political influence. There are a handful of people on Forbes' 100 most powerful people and most of them are politicians, and these people can influence the world order to trade with their money. Central banks and governments can demand others to buy and sell commodities to them using their currency. Now since there are way more people trading with paper currencies like USD, EUR and CNY you wonder why they don't have a large trading value like the precious metals above. That's because central banks control the supply and demand of their currency to make it optimal for the political ambitions of their government.



These are platinum crystals. You can imagine bitcoin looks like this, only digitally. Bitcoin has never been counterfeited. It is durable, and cannot be damaged or destroyed. Since all bitcoins are original, they have a rarity comparable to the crystals above, a rarity which the human eye can't see.

The reason bitcoin is stuck in the 4-digit range for so long is because it needs a multitude of new adopters to trade with it. This reason also explains why the price was in the hundreds several years ago, and why it was still lower during its first years.

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[exstasie]

Intrinsic value of a physical material, gem, metal, coin or digital coin can be defined as 1) how precious it is and 2) how much people are trading with it.

I don't think that's a great definition.

How scarce or precious an asset is doesn't tell you how much the market is willing to pay for it. You could spin up an altcoin today with even more scarcity than BTC but that won't create demand for it.

What does trading volume have to do with it?

I'm of the school of thought that says intrinsic value is only useful in the sense of equity investment. Intrinsic value represents the actual cash flow or ongoing operational value of a business or property. This is why you hear it used in the context of stocks and real estate.

This can't really be applied to speculative assets like BTC and gold since we don't have objective ways to measure their value. They don't generate a return on investment. https://en.wikipedia.org/wiki/Intrinsic_value_(finance)#Equity

[hatshepsut93]

You have one big problem in your theory, first you say that the value of money is determine by how much people are trading with it, but then you reject the value of paper money, despite the fact that so many transactions are done with, especially if by "paper money" we mean all fiat money, including bank accounts, because they are the same money.

You are wrong to take scarcity as a part of the intrinsic value, because intrinsic value has always been about attempting to calculate the value of something while completely ignoring the market situation, aka supply and demand. Then, you combine your calculation with supply and demand to decide if it's better to go short or long.

Whether Bitcoin has intrinsic value or not is a matter of asking what is intrinsic value. From the point of view of stock trading, Bitcoin has no intrinsic value, because it doesn't generate value. As a commodity, it also doesn't have value, because it has no non-monetary use cases. Wikipedia tells that there's a think called intrinsic value of commodity money, and while Bitcoin isn't a commodity, it falls under that definition nicely.

But the problem is that compared to equities, where people can make very good calculations, it's much harder to do so with things like Bitcoin. How much $ are divisibility, ease of transporting, anti-counterfeiting  worth?

The more you think about intrinsic value, the deeper you regress back to primitive economic theories like marxism, which believe that things have essential value independent from the market.

[Gozie51]

I'm trying to understand the lack of intrinsic value to be that money isn't sellable as an asset just like other metals and bitcoin. But then, I think this is not exactly true because cash or money can also be stored in expectation of a rise due to inflation or deflation. Again too, some less developed countries can buy currency of virile economies and hodl just as cryptocurrency, metals, gold can be held for future profit.

[Sanugarid]

Bitcoin has intrinsic value and the paper money don't have? But isn't it paper money that powers the bitcoin? bitcoin will not have a value if we don't buy it using fiat right? and just so you know paper money does not have intrinsic value because it does not need it to work, you see we always use the paper money in most of our transaction, Unlike bitcoin and other metals that we use to store value.

"Many people argue that bitcoin has no value because it exists digitally and has no physical form. If that argument was true then virtual collectables in video games wouldn't have any intrinsic value either but yet we see people selling and trading Counter Strike and Fortnite skins which also don't exist physically."

It is very different from what you give as an analogy to bitcoin, bitcoin is far from virtual collectibles. Let's give an example, the item in dota2, Axe of Phractos which costs more than $1000 but does it have intrinsic value? none even it is limited, they are just valued by how uncommon to get it from the chests unlike bitcoin that you can buy anytime, anywhere.

The reason bitcoin is stuck in the 4-digit range for so long is because it needs a multitude of new adopters to trade with it. This reason also explains why the price was in the hundreds several years ago, and why it was still lower during its first years.

or just  millions from big players to get the job done.

[btcltcdigger]

Paper money could also have intrinsic value, just as crypto. But the thing is, it acts as a crypto which has a "generate more" option, and that's why it's value is low, or even loses it's value.
Take bonds and stocks for example, they have intrinsic value, yet are still "paper" in every sence

[ashmodeus]

well,nice theory,but let me tell about my theory.
in theory, all that is limited has have a value,then the value is given in fiat currency,which is a common thing in everyone's perspective.Fiat currency is issued by a government and not backed by any commodity, but rather by the faith that individuals and governments have that parties will accept that currency,which is have no intrinsic value like you say before,although fiat has no value, fiat has a "sovereign" nature,which it the important thing in human life,especially for global economy. I guess its enough about basic explanation.
so why do people still like to save money instead of buying something of intrinsic value, isn't that what you have in mind?

fiat besides providing security for a stable value guaranteed directly by the government ,mostly, to give a value to something like that (we are talking about gold and bitcoin), it depends on how many people want it, for example gold, we can see clearly how many parties who want gold, how much investment is spent on mining gold, it is one of the most important things to measure the value of gold, gold will not just get the value it is now just because of its scarcity, precisely because of its scarcity it takes a big investment to get that gold, and that makes the benchmark the value of these gold,"In 2004, for example, gold miner Barrick Gold reported an average cost of production of just $300 per ounce of gold it mined. By 2011, this figure had more than doubled to $630 per ounce, and it continued rising to $800 an ounce in 2014",the question,can gold go back to the 2004 price ? there is no guarantee of that, but from an investment standpoint, that is only a very small possibility, considering how much investment has been spent on it.
this also applies to bitcoin,or even more.
u know what exactly bitcoin is it, its a decentralized electronic money with PoW protocol,bitcoin will have no value if no hashrate there to securing bitcoin network,and hashrate will be created from how many parties are mining bitcoin.

[odolvlobo]

Intrinsic value of a physical material, gem, metal, coin or digital coin can be defined as 1) how precious it is and 2) how much people are trading with it. The word "precious" is also subjective and has different interpretations, but you can quantify preciousness, at least for physical items, by how attractive something looks. Diamond can be cut at a certain angle to make a gem that gives off brilliant colors, and also it can be cut in different symmetries, the more aligned they are give them a higher value. The same can be said for other gems. Gold, and some other precious metals like platinum, aren't reactive as other metals and withstand corrosion from many acids, and is also extremely malleable.

I disagree with your definition of "intrinsic value". Here is my definition:

Intrinsic value is the value that something would have even if it were to exist in unlimited quantities.

For example, air and water have intrinsic value even though they are effectively unlimited. In other words, the intrinsic value of something is not effected by its supply or demand, and it thus is not related to its price.

I struggle with that definition because I really believe that intrinsic value is "objective" value, and since all value is subjective, intrinsic value cannot actually exist. But, since people like to talk about intrinsic value, I think a definition is needed that tries to describe what they are talking about.

Intrinsic value is determined by scarcity.

In my view, intrinsic value has little to do with scarcity. There are unlimited examples of scarce items that have no intrinsic value. There is only one Pluto. Does it have any intrinsic value? When you describe value associated with scarcity, you are describing "collectible" value. That is, the value of owning something that other people don't own.

Paper money has no intrinsic value

Paper money is ... made from 75% cotton and 25% linen.  But even this can be manufactured en masse and thus has no intrinsic value. ...

That is absurd. The value of money has nothing to do with what it is printed on. You could say that bitcoins have no intrinsic value because they exist via electrons and there are an unimaginable number of electrons in the universe.

[The Sceptical Chymist]

Intrinsic value of a physical material, gem, metal, coin or digital coin can be defined as 1) how precious it is and 2) how much people are trading with it.

Eh, I don't think the definition of intrinsic value has much to do with either of those two things.  You defined "preciousness" as how attractive-looking something is (at least for physical things), and when you take into account that beauty is entirely subjective I'd say that there are a lot of things out there that are very beautiful but aren't valuable--and there are some horrendously fugly things which are worth a great deal of money--a lot of artwork IMO falls into that category. 

"How much people are trading with it" would depend on an item's intrinsic value rather than be something that defines that intrinsic value.

The more rare a precious item is, the greater its value.

That most definitely is not true.  There might only be one of something in the world, but if there's no demand for it, it doesn't have much value--at least if you're talking about market value.  That something might be extremely useful in some way, in which case I'd say it has some degree of intrinsic value.

This concept of intrinsic value tends to get misinterpreted a lot, and I've generally come to discard it when I look at investments or anything else.  Plus I've always thought that nothing has true value simply by virtue of its existence (an intrinsic property) except perhaps for human life.  Everything else comes down to supply and demand and how much someone is willing to pay for something at any given point in time.

[Kakmakr]

That is not 100% the truth... Let's say I have the only piece of paper that were signed by say Babe Ruth or Bill Gates after his death and nobody else has their signature.... then that piece of paper would have a lot of value. Also remember some of the scarcest Stamps are printed on paper.  

Also note that "Paper money" money are not made of paper at all.... United States currency paper is composed of 75 percent cotton and 25 percent linen.  

My method to measure somethings intrinsic value is more based on the willingness of people to pay for something.... Would you pay more for the bullet that killed Kennedy or for the weapon that killed Hitler?

I paid $2000 to buy back my old ZX Spectrum that I owed when I was 12 years old... the real value are much less, but that specific one had a very special place in my heart when I was much younger.. so I did not mind to pay much more for it.  

[exstasie]

This concept of intrinsic value tends to get misinterpreted a lot, and I've generally come to discard it when I look at investments or anything else.  Plus I've always thought that nothing has true value simply by virtue of its existence (an intrinsic property) except perhaps for human life.

That's the primary misinterpretation right there.

The term emerged as a way to measure the underlying value of a security, separate from the market value. Let's say you are analyzing dividend-yielding equities and want to find a good deal. You would look for companies with impressive earnings and cash flow but un-hyped stock prices.

Somewhere along the line, this idea got perverted. Gold bugs and similar investors (and BTC investors too) latched onto the term, arguing there must be inherent value in certain assets, due to one property or another. I've always found the arguments uncompelling since we can't objectively measure that sort of value.

The original definition of intrinsic value still makes sense in the context of revenue-generating assets like stocks or real estate.

[FanEagle]

Paper money "had" an intrinsic value back in the day, it was pegged to gold and that is why it had a real value, whatever amount of gold you had that much dollar you could have printed, your dollar actually represented the amount of gold you owned and since gold is scarce and valuable in itself, that means your dollar was very valuable, hell even could be said that it could gain value over the years.

After some time in history governments decided that it should not be tied to gold standard anymore and that is why there is absolutely nothing fiat is based on anymore and they could print trillions upon trillions of it without a problem. This caused fiat to devalue and ever since that moment inflation has hurt salaries a lot more than it has hurt the prices of stuff and people got poorer and poorer.

[NotATether]

It was interesting to read the replies here and have a constructive debate on this theory, my intrinsic value definition turned out to be wrong so let's see if we can come up with a better one and refine this theory in general. Also it looks like my title should've been "Bitcoin and some metals have much more intrinsic value than paper", since I do believe paper itself has value, even if it's only a little, but it's not like it has no value at all. In the title I should've said paper in the context of money, since it makes more sense to say "paper money only has as much value as the paper unless sovereign governments buy it up" than "paper and paper money have absolutely no sense whatsoever" and I was trying to give off the first interpretation not the second but the words must have slipped out of my head.

I did write a whole section with a large text title saying "Paper money has no intrinsic value" but as I just learned, these things are subject to different interpretations so instead of writing this by itself it would've been better if I had some clarification at the end of it and not make it a title.

I'm of the school of thought that says intrinsic value is only useful in the sense of equity investment. Intrinsic value represents the actual cash flow or ongoing operational value of a business or property. This is why you hear it used in the context of stocks and real estate.

This can't really be applied to speculative assets like BTC and gold since we don't have objective ways to measure their value. They don't generate a return on investment. https://en.wikipedia.org/wiki/Intrinsic_value_(finance)#Equity

I'm aware there's a definition of intrinsic value in relation to finance and stocks, I couldn't think of a better term to describe the value something would have by itself so I just used "intrinsic value". If you know of a better term for what I'm describing you're welcome to post it.

You have one big problem in your theory, first you say that the value of money is determine by how much people are trading with it, but then you reject the value of paper money, despite the fact that so many transactions are done with, especially if by "paper money" we mean all fiat money, including bank accounts, because they are the same money.

Yeah that's definitely not what I intended to rub off, I meant to say the value paper money had on its own, without any use by governments, is only as valuable as the medium it's based on. Here's an example: The currency of defunct countries has absolutely no equity and thus from a trading point of view you can only treat these currencies as stacks of special paper.

You are wrong to take scarcity as a part of the intrinsic value, because intrinsic value has always been about attempting to calculate the value of something while completely ignoring the market situation, aka supply and demand. Then, you combine your calculation with supply and demand to decide if it's better to go short or long.

Whether Bitcoin has intrinsic value or not is a matter of asking what is intrinsic value. From the point of view of stock trading, Bitcoin has no intrinsic value, because it doesn't generate value. As a commodity, it also doesn't have value, because it has no non-monetary use cases. Wikipedia tells that there's a think called intrinsic value of commodity money, and while Bitcoin isn't a commodity, it falls under that definition nicely.

But the problem is that compared to equities, where people can make very good calculations, it's much harder to do so with things like Bitcoin. How much $ are divisibility, ease of transporting, anti-counterfeiting  worth?

The more you think about intrinsic value, the deeper you regress back to primitive economic theories like marxism, which believe that things have essential value independent from the market.

Now that I think of it, it wasn't smart of me to write that in a whole section. For physically quantifiable things, so not stocks or bonds (or even bitcoin) or any of that, scarcity is pretty much the same as rarity, which has no connection to intrinsic value, because if something is rare and has a high intrinsic value then it's just a coincidence.

It looks like we're getting somewhere now. Now we have a few pillars so define intrinsic value by:

- its divisibility
- how easily it's stored and transported
- securely it's stored and transported
- its scarcity
- its difficulty to counterfeit

So all these things together give it a certain intrinsic value, which as was pointed out has nothing to do with trading value, the word "value" by itself easily misinterpreted in a different context.

"Many people argue that bitcoin has no value because it exists digitally and has no physical form. If that argument was true then virtual collectables in video games wouldn't have any intrinsic value either but yet we see people selling and trading Counter Strike and Fortnite skins which also don't exist physically."

It is very different from what you give as an analogy to bitcoin, bitcoin is far from virtual collectibles. Let's give an example, the item in dota2, Axe of Phractos which costs more than $1000 but does it have intrinsic value? none even it is limited, they are just valued by how uncommon to get it from the chests unlike bitcoin that you can buy anytime, anywhere.

OK so they don't have intristic value since Valve or any other game developer simply creates them at some point, but they at least have trading value, which on a side note increases when they are no longer for sale officially. And in the quote that you have it looks like I meant to say "Many people argue that bitcoin has no trading value", look at Peter Schiff for example.

Intrinsic value is the value that something would have even if it were to exist in unlimited quantities.

For example, air and water have intrinsic value even though they are effectively unlimited. In other words, the intrinsic value of something is not effected by its supply or demand, and it thus is not related to its price.

I think this is the best definition for it in this thread and it's consistent with my analogies for gold and gems (and paper but see the next paragraph)

When I declared "paper money has no intrinsic value" I meant in the sense that a newly printed currency has an extremely low valuation unless its government did things like reduce its inflation and buy bonds for the new currency, so the value of the currency, the paper money, is entirely at the mercy of its government and decided by it. So paper money does indeed have value but that value is variable. I was referring to "intrinsic value" in the sense of what is the fixed value of an item if it was not manually altered in any way (gems can shatter, gold can get damaged etc.) and I don't just mean an element in its natural form I also refer to manufactured things as well.

In a shorter sentence: "... fiat money, which has value only because it has been established as money by government regulation. " (wikipedia)

So governments can just decree something to be money and that's how its value changes. None of this has anything to do with intrinsic value. The government controls all of the pillars I mentioned above and if they are manually controlled its value can't be called intrinsic, its a value with some other name, perhaps "extrinsic" is suitable.

Paper money has no intrinsic value

Paper money is ... made from 75% cotton and 25% linen.  But even this can be manufactured en masse and thus has no intrinsic value. ...

That is absurd. The value of money has nothing to do with what it is printed on. You could say that bitcoins have no intrinsic value because they exist via electrons and there are an unimaginable number of electrons in the universe.

I didn't intend for people to think of its value with respect to what its printed on, I merely mentioned what its made from in case some people thought money was made from normal paper.


Something I haven't answered in this post up to now is how any of this applies to bitcoin, the main topic of this thread. I have the opinion that since bitcoin and cryptocurrencies are created out of thin air, though the process of mining, it's kind of like having a government writing a regulation establishing a certain currency as money, and then how valuable (the trading one) they are depends on how much they are bought.

But here's the thing: what if instead of bitcoin we were talking about some cryptocurrency that is merely mined into quantities, without being able to trade it on exchanges? Then even if the pillars I mentioned above were strong for it, it has absolutely no trading value, and it does not even have any intrinsic value because it is useless as a commodity. And bitcoin in its early stages wasn't traded, and is still today can't be used as a commodity, so the same conclusion can be derived for it too.

Which leads me to think that I may have refuted the central point of this thread: that bitcoin may not have intrinsic value after all.

Again, it was great discussing these points.

[abhiseshakana]

Paper money "had" an intrinsic value back in the day, it was pegged to gold and that is why it had a real value, whatever amount of gold you had that much dollar you could have printed, your dollar actually represented the amount of gold you owned and since gold is scarce and valuable in itself, that means your dollar was very valuable, hell even could be said that it could gain value over the years.

Money does not provide direct use (indirect utility function), but can be used to buy useful goods. Every currency is money, but not every money is currency.

What has intrinsic value is if gold is processed into gold coins recognized by the government as a legal payment instrument. Why is that? For example, when gold is no longer recognized as the currency of a country, the gold contained in that money is still valuable and has the same value. Next, we take the example of Singapore, if the SGD 10,000 banknotes equal to USD 7,233, so when the Singaporean government revokes its decision and uses the money of another type, then the banknotes will have no value at all.

After some time in history governments decided that it should not be tied to gold standard anymore and that is why there is absolutely nothing fiat is based on anymore and they could print trillions upon trillions of it without a problem. This caused fiat to devalue and ever since that moment inflation has hurt salaries a lot more than it has hurt the prices of stuff and people got poorer and poorer.

Strangely not many countries protest to the US, why can the US print dollars as they like, while other countries must have collateral in the form of gold or dollars?

Issuance of fiat money creates new purchasing power from something that is not valuable. Because the money has no price but reflects the price of all goods. In addition, there is a return on the issuance of the money for the money issuing authority. For example, if a money printing fee of SGD 10,000 costs only SGD 0.2, the seigniorage benefit is SGD 9,999.8. The difference in intrinsic value and the nominal value of paper money causes economic bubbles and an economic crisis occurs because almost all paper currency systems suffer from over-printing conditions.

The use of money with intrinsic value becomes a strong character to stabilize the economy. In publishing, there is no new purchasing power (no seigniorage).

[exstasie]

Strangely not many countries protest to the US, why can the US print dollars as they like, while other countries must have collateral in the form of gold or dollars?

Raoul Pal has a theory he calls "The Dollar Wrecking Ball." Here's a thread about it: https://twitter.com/RaoulGMI/status/1254110879479746562

Important points:

There are simply not enough dollars available in the world to service all the debts and thus a debt deflation remains the BIG RISK.

We are in a viscous doom loop where slowing growth causes the dollar to rise, which causes slower growth, which causes the dollar to rise, as all borrowers play musical chairs to get access to the dollar to service debts

For what it's worth, he was obviously wrong about his DXY prediction in the short term, although he was spot on regarding BTC and gold. Not sure what to make of it.

[mu_enrico]

The theory about intrinsic value is obsolete anyway, so it doesn't matter. Modern economist accept the marginal utility theory, or subjective value.
It's recommended to read the paradox of value (or diamond and water paradox)

[DoublerHunter]

^ Money in particular to paper bills has no intrinsic value rather they only have a relative value which denotes how much and how far it can be used in trading for certain things. Paper money at some points may have low value because of the materials used to produce it unlike with golds and other precious gems the value rely on its abundance and demands of people on it but still, the value of paper money doesn't rely on its material for it has been known and recognized globally on what it can give you when you trade or exchange it of something. Nevertheless, if we are going to talk about something that is abundant and still has a great value you may try looking around you will see it is not only because of their intrinsic value as you what you call it but it's important that made them valuable at all.

[mu_enrico]

^ Money in particular to paper bills has no intrinsic value rather they only have a relative value which denotes how much and how far it can be used in trading for certain things. Paper money at some points may have low value because of the materials used to produce it unlike with golds and other precious gems the value rely on its abundance and demands of people on it but still, the value of paper money doesn't rely on its material for it has been known and recognized globally on what it can give you when you trade or exchange it of something. Nevertheless, if we are going to talk about something that is abundant and still has a great value you may try looking around you will see it is not only because of their intrinsic value as you what you call it but it's important that made them valuable at all.

That's not correct mate (based on economics).

Intrinsic value is another term that refers to objective theory or classical theory. It has a view that the value of goods and services is intrinsic or can be measured objectively, e.g., labor, utility, Marx's exchange value (of a commodity). Long story short, it has failed to explain why, let's say, when you find some diamond on top of your garden, it still has high value despite you didn't put substantial labor to get it. It also failed to explain why water has a substantially lower value (in most circumstances) than diamond despite its superior utility to keep you alive. And why some people value stuff differently (about preference).

Even with the classical/intrinsic value theory, paper money still has some value because of its labor-value and utility-value.

Nevertheless, we have moved to the subjective theory of value.

[Darker45]

Nevertheless, we have moved to the subjective theory of value.

I agree. The discussion is now on how you perceive intrinsic value.

I consider intrinsic value as the value that is found in the object itself, that is, apart from any subjective value attached to it by way of agreement or any imposition.

The intrinsic value of gold, for example, is found in its goldness or being gold. And so it doesn't have anything to do with scarcity, or its being a store of value, and so on. It only has something to do with how the actual gold could be utilized. For paper, whether it is in the form of money or check or birth certificate or diploma or employment contract or whatever, the intrinsic value remains the same, which is found in its being a paper.

[Ucy]

Or maybe we should think of "how useful"  and "how precious" they are? Very useful and abundant things can be precious or valuable to people who know their true value. If you make fruits scarce, they will become expensive and more people will probably understand their values and start hunting for them. But lots of the scarce precious things don't have lots of known wide uses compared to their prices. If they continue getting scarce and expensive, they will probably become to tiny to be divisible, hard to hold, see or use. And it will be too costly to get enough of them to build important things  they are built with.

 I Would be careful depending too much on the scarce things that don't have lots of known, easy-to-apply uses, especially during serious crisis.