cross-posted from: https://lemmit.online/post/6076221
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The original was posted on /r/todayilearned by /u/tyrion2024 on 2025-06-14 17:26:48+00:00.
Original Title: TIL in the 1980s, a woman bought a ring at a car boot sale for £10 & proceeded to wear it regularly under the assumption it was a piece of costume jewelry. However when she had it appraised decades later, it was identified as a real 26-carat diamond ring from the 1800s, which she then sold for £656K
It’s so weird to me that a diamond can possibly go for that much. I understand that this one was probably made a long time ago based on the way it was cut, but it’s not like we don’t have the means to create an exact replica of it. This thing is pure carbon. There aren’t even impurities to make it interesting.
It’s the same with anything that had a value that goes beyond pure utility.
It’s not hard to make a functionally identical copy of the Mona Lisa, indistinguishable by anyone apart from the most highly skilled forgery experts.
And yet the Mona Lisa is still incredibly valuable and considered a one-of-a-kind, same as diamonds in the OP.
All of that value is based on the greater fool theory: the theory that if I pay a lot of money for it, I think I will find a greater fool later on who will pay even more for it. And that fool believes the same thing until the charade eventually collapses.
I don’t think the Mona Lisa is a good comparison. When it comes to old paintings, there’s a lot of interesting stuff happening underneath the surface image that tell an interesting story. They can be analyzed to see all the mistakes that were corrected, or changes that were made to the painting. I believe it was also commonplace to reuse old canvases, so with the appropriate technology, you would in theory be able to look underneath and see everything that came before as well. So I can definitely see why that would be valuable.
Still don’t understand diamonds though.
Even if you copy the Mona Lisa down to the subatomic level, the original would still be seen as a one of a kind thing and would be vastly more valuable than the copy.
Because it’s not about the physical object.
It’s about the hope that it can be, one day, sold for more money than it was bought for. The same thing happens every day with all sorts of things where the price vastly outpaces the utility of the thing.
If you buy milk, you buy it to drink/eat/use it. So you pay for its utility. A litre of milk is worth its nutritional value. There’s no speculation or anything like that going on, and thus, the price is pretty low and pretty stable.
If you buy valueables (art, diamonds, stock, crypto, NFTs, …) the object itself is usually not useful or at least not nearly as useful as its price. Yes, there are some technical applications where you need gold or diamonds, but if that was the only thing they are used for, they’d be much, much cheaper. Art, stock, crypto, NFTs, stamps, and many similar things, on the other hand, have little to no direct utility. Nobody would buy the Mona Lisa because they have an empty bit of wall in their living room that would benefit from a bit of art as decoration.
These things, which are inherently worthless (if they were priced by their utility). The only reason for them to be “worth” a lot is the expectation that someone else will pay more for it in the future, for the sole purpose of finding someone else who’ll do the same.
It’s just a morensocially accepted form of gambling, nothing else.
And for that, it doesn’t matter if the thing being sold is a link to some picture of a bored monkey, a piece of paper with some paint on it, a banana ducttaped to a wall, or some shiny rock.