One of the most asked questions around Bitcoin is where it gets its value from or what is “behind it”.
Building on the core argument in Yuval Harari’s seminal book Sapiens, we must accept that much of what we consider “intrinsic value” is derived from a social consensus that has developed over time. So, while gold has some industrial value as a metal, the social consensus around it as a store of value has greatly inflated that value.
Then, Bitcoin has a clearly defined scarcity and rate of inflation. The currency supply is not being inflated at the whims of any government.
Finally, Bitcoin has significant utility and that itself has a value. You can nearly instantly send money now to anyone, anywhere in the world if they have a Bitcoin wallet. No middlemen, low fees. That’s utility with value.
The combination of the above suggests to me that there is a growing trust that Bitcoin is secure, its scarcity is known and has great utility. As result, there is a rapidly developing consensus that it is a store of value just as Gold is.
Whereas gold’s intrinsic value comes from a combination of the scarcity of the metal and the social consensus that has developed over millenia, Bitcoin’s intrinsic value comes from a consensus around precise scarcity, proven security and significant utility.