What Is Value?
What is money? What is value? Why does gold have value? The only way to answer this question is by looking at value from first level mathematical principles.
The reason why any of the above abstractions has value, lies in their encryption scheme. Value is simply encrypted energy, whether that’s monetary energy, or life force.
The reason Gold has value, and the reason why it functions as a store of wealth, is because Gold is encrypted chemically, thanks to the laws of physics. Gold however is not a thermodynamically closed energy network, because it’s subjected to 2% inflation with time, due to the mining of new Gold.
The reason Fiat has value, is because Fiat is encrypted through trust mechanisms. These trust mechanisms are the Fed, the Central Banks and the sovereign nation backing them with military force. This is most definitely not a thermodynamically closed system, because the Fed can keep printing money forever. The trust is also not there, since the whole financial system is one big Frankenstein monster.
Bitcoin has value because its encryption lies in decentralized cryptography that’s unbreakable. It’s currently in the value consensus building phase. It’s building value consensus exponentially, in cyclical waves, as humanity is adopting it, following its halving cycle and stock to flow model. It’s also deflationary with a hard cap, meaning that it’s a thermodynamically closed system.
All of Gold, and all of Fiat, and essentially all monetary energy there is in the world, will keep moving into Bitcoin in an exponential fashion. So will all other “shitcoins”.
Once all monetary energy is in Bitcoin, and once the consensus building phase is over, Bitcoin will keep rising exponentially in value because the value humanity generates grows exponentially.
This whole thing can boggle the mind. However, the math checks out. Through the above lens, one can argue that Bitcoin has the highest form of intrinsic value mathematically possible, and due to the game theory surrounding its adoption, a full transition seems to be inevitable.