Imagine you have a bag of gold coins and your friend has a bag of paper notes. If people trust the paper notes to be as good as gold, they're valuable. When more people want to use those notes, their value goes up like magic, just like how a popular toy becomes more expensive when everyone wants it.
Examples
- If you have a chocolate bar and your friend has two, yours is worth more if everyone wants it.
- You trade a candy for another one because they look better.
- Your little brother gives you five stickers in exchange for your toy car.
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See also
- Why Do We Use ‘Symbols’ in Money and What Makes Them Valuable?
- How Do ‘Coins’ Know When to Be Worth More or Less?
- How Does a Coin Become Valuable?
- How Do ‘Currencies’ Get Their Value and What Determines It?
- What Makes a Coin Worth More Than Another?
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