A common analogy used to explain this is the prison analogy. In prison, cigarettes are used as currency. In reality, cigarettes are really not worth that much, but they hold a much higher value in prison. Why? There is a limited supply of them, and the prisoners have decided to recognize them as their form of currency. They are effectively the prison’s form of money because the prisoners have elected to recognize it as such. This is also like if you play poker for matchsticks. The matchsticks have no actual value, but they’re given one when you and the other players elect to recognize them as your form of currency.