This misses the point. There is a distinction to be made between inherent value (nothing has inherent value) and arbitrary value, where people make claims about the utility of some thing even if that thing cannot provide said utility in the real world. Yes, it is possible to make arbitrary trades, but the function of MONEY is to enable a double-coincidence of wants for goods from which people derive real utility.
What logically follows from your argument is that ANYTHING can be money merely because people BELIEVE it is worth X.
So here’s the setup to my question: Suppose governments around the world see the light, and totally get out of money and banking, treating them as lightly as the pizza industry. In such a world, I predict that gold and silver would quickly become the world’s monies once again, with competing, private-sector mints issuing coins, and competing, private-sector commercial banks issuing notes and electronic claims against their gold and silver reserves (let’s not argue about whether those claims would be backed 100%). People would walk around with actual gold and silver coins in their pockets, and merchants might even start pricing goods and services directly in weights of metal, rather than national currencies.
Now for my question: Suppose in this world, people over time found better items that replaced the actual industrial and consumption uses for gold and silver. Thus over time, an ever rising fraction of the demand to hold gold and silver is purely for monetary purposes. So at some point in this process, would all of the hard money people declare, “Shucks, at this point gold and silver are like Bitcoin was during that fad from 2009 – 2015. People are now only accepting gold today in trade because they think others will accept it tomorrow, not because they know there is a backstop where they can trade the gold and silver coins to dentists. We need to find a new money commodity, that is currently being used in production” ?
(If it matters, I am almost positive that I have read one of the Austrian giants say that it’s not necessary for a commodity money to remain a commodity, merely that there is the historical link to satisfy the regression theorem. But unfortunately I can’t find such a quote, so maybe I’m hallucinating.)