Inherent Value of Bitcoin

It seems to me that all currency is based on consensus.

For example,in a town called Mallville, I may cut Bill's lawn for which he pays me 10 lumps of iron which I can then use to purchase lunch from Amelie for 5 lumps and then keep the other five, because I want to one day purchase a cow from Mary who demands 500 iron lumps for each of her cows.

Such a system could only work if we all agreed to use a standardized lump of iron as a representation of value. It has nothing to do with the "intrinsic" value of the iron, and if it came down to it and the price of the lunch was 10 lumps then I must pay it because I certainly cannot eat the iron lumps.

This would be still be true if the agreed mode of exchanging value was ingots of gold. If lunch cost 10 of those ingots then so be it - I would pay it because I would not be able to eat the gold.

The only reason that I might refuse Amelie's price for lunch is because based on the agreement or consensus in that particular society, lunch should cost about 5 gold ingots. Amelie is bucking the system with her outrageous prices and so I'll remain hungry, keep my gold ingots and walk down the road searching for a vendor who is part of the societal consensus and will sell me lunch for 5 ingots of gold.

Imagine in my travels, I come across a new town - Greenburg - where for some reason they don't value my gold ingots.
I got to Amy's Diner to get some lunch but she wants five elm twigs in exchange for her service. So I find a gentleman - Bert - who will pay me 10 twigs for cutting his lawn, and I think to myself: "Wow - this place is pretty similar to the last".

But what about the "intrinsic value" of my gold ingots? why do these new people trade in elm twigs? My gold is little more than a curiosity here. So it seems that my gold did not have intrinsic value after all... it's only valuable if the society agrees that it is.

I then discovered a thing. After only a few years, the prices in town Greenburg went sky-high. It turns out that many people began planting small gardens of elm trees after their twigs were agreed to have value. And so, there were soon so many elm twigs in everyone's hands that Amy was asking for 500 twigs for lunch. It seemed that no matter how many twigs I saved, it was never enough to allow me to purchase some land in Greenburg so that I could grow my own elm trees. I continued to cut Bert's lawn but often I would undersell myself -asking for 1200 twigs for the job only to find that lunch at Amy's was now 800 twigs. I was living hand-to mouth. I read in a scrap of newspaper that gold was a superior form of currency because it was scarce and thus less prone to the inflation that had ravaged Greenburg. So I packed up and moved back to Mallville with my 5 gold ingots.

I arrived back at Mallville and was amazed at the development that had taken place and comforted by the apparent economic stability. Bill payed me 12 gold to cut his lawn and Amelie asked for 7 gold for lunch. But the town had grown! There were new residents and new businesses, and monuments and parks and new people to attend to them. And there was a striking new land mark - a mansion on the old hill, gleaming in the sunlight as if it were made of gold itself. My only reservation was that the gold ingots seemed... duller than I remembered... they seemed duller that the five that I'd kept.

I asked Amelie one day over lunch what had happened.

It so happened that Jarred (the owner of the gleaming mansion), had found some more gold on his property where he lived. He pressed some new ingots of gold and hired labor from surrounding towns to construct his grand vision of his home. And after they were done, they remained in Mallville (possibly because the gold that they were paid did not seem to have intrinsic value in other places).

I'm curious about people who ask the question then "what is the intrinsic value of a bitcoin?"
It is the same as the intrinsic value of any other proposed medium of exchange. It's value lies in it's network effect. It's value is conferred if a society decides to use it. Consensus.
Excluding forms of currency that were food or maybe clothing (eg. pelts?), the intrinsic value of bitcoin is similar to other forms of currency... that is to say - not much tangible value. What is the value of a seashell, or volcanic glass bead or emerald, beyond the aesthetic appeal, and AGREEMENT at the time of their value?

If adopted, then the "value" that bitcoin will enjoy will be the same as that of any other agreed upon "valuable" entity - and no one would question it's intrinsic value. Consider that we currently deceive and steal from each other, exploit and even kill each other over pieces of canvas and paper; over bits of shiny metal and shiner rocks. We even hurt each other over interesting arrangements of pigments on canvas. (For any who would argue the technological intrinsic value of stones please don't. No one steals blood diamonds and padparadschas for science).

If adopted, the intrinsic value that Bitcoin would hold over historical currencies would be it's resistance to being "cut" (diluted). In the story above, Jarred didn't find more gold, he simply did what many before him did - he mixed it with some more commonly available metal and simply pressed more ingots.

For those who would argue that creation of new cryptos or forks of existing ones would dilute the value of any particular cryptocurrency - they do not. Think of discovering rubies and then think of finding emeralds after and then the surge of popularity of diamonds. One did not say "well there goes the gem market... too many gems... they're all worthless now". No. Various gems held their value and even increased in value for ... reasons (remember this was never about intrinsic value); and diamonds became the thing of legends - wars, people killed, marriage proposals, infidelity apologies etc.

I'm not a bitcoin evangelist. This is why I like cryptos and think that much of the discussion about them at the moment feels like deliberate misdirection and nonsense.

Is it a security? Is it a commodity? Are they (cryptos) all the same? Can something be both a commodity and a currency? etc... the people debating these things are too smart for any of these questions to be conundrums. So ask yourself:
"What really is THE issue regarding cryptocurrencies?"

PS. If Bitcoin is the Netscape to ABC's Google - can someone plz tell me which coin is gonna be the Google of the future... I need to get rich... for reasons... so thank you! ;-)