There is this part of my brain which refuses to believe these arguments are as dumb as they feel. Like, what am I missing? Thr argument goes like

"if you can cut something up into tiny pieces, that means the supply isn't scarce"

But wait. Splitting the pieces up doesn't increase the supply. The information about the TOTAL WHOLE SUPPLY is almost perfectly symmetric across the economy. Everyone knows the total supply that there is and how much there will be. If every small piece has weight unit n, splitting the pieces up further doesn't add weight to the whole system. Since the economy knows how much total whole supply there is, they can readjust the value of any smaller denomination very quickly.