Hi Edward,
I don’t know why we have started discussing gold’s role as money on this thread. But I do find this conversation interesting, as it relates to bitcoin’s value, but for that we have a seperate thread.
As for the rare stone as money example, you may want to read about the actual historical example from yap island. https://en.m.wikipedia.org/wiki/Rai_stones
Rai stone were good as money because they were rare and difficult to produce, until European sailors set foot on the island. They were able to produce more Rai stones cheaply using explosives, a technology not available to Yap island residents. The result - the wealth of the island residents got transferred to European sailors.
The same took place with some African countries, which used glass beads as money. It worked well because these beads were rare and difficult to produce, until Europeans who have access to better glass technology reached there. The result was gradual transfer of their wealth to Europeans as they can obtain useful goods for cheaply produced glass beads.
So the commodity used as money must be carefully chosen. The additional production of that commodity transfers the wealth of commodity holders to its producers. One reason for transfer of wealth from India and China to Europe was because for some time we were on silver standard, which is easier to produce than gold. It is not by accident that the world eventually settled on gold standard, as gold remains difficult to produce and its fresh supply relative to existing stock is small. But that may change in future, by say, it becomes easier to mine asteroids.
Ofcourse now we live in the world of fiat currencies, which initially started as convenient means to exchange gold kept in bank vaults. To some extent their value is still backed by gold reserves central banks maintain. So gold still remains a valuable commodity, and I do not view people trying to preserve their savings in gold as bad. Yes, they have the option to keep their savings in fiat, but paper currency is easy to produce, and everytime central banks print more they expropriate the wealth of those saving in their fiat.
In comparison, bitcoin supply is rigidly fixed, and being digital, it can be an even better store of value than gold. If that happens, there will be a transfer of wealth from those holding gold or fiat (partially backed by gold) to those holding bitcoin. That is what will drive the bitcoin’s gains.