If the gold value was based on what it takes to mine it then the price wouldn't be so high. After all, they use slave children to mine and pay the families peanuts. There are several but the most significant parameter is the quotation established by the "fixing".
If the volatility is not something that people can handle then the cryptocurrency market is certainly not for them. Because there is not a lot much more volatile than cryptos
I agree. The problem here is that we can see what the price is whereas value is more of a concept that we dont have an algorism to calculate. Anyway, if we dont take into account offer and demand we cant explain the value of bitcoin as well as many other assets and goods.
Adam Smith was right in some of his opinions and wrong in others, but we cant take his opinions as dogmas of the Church.
What is the cost of labor involved in making a 100$ note? It is more or less the same as the cost of labor involved in making a 1$ note.