Back in 2010, when the mysterious founder(s) of bitcoin, known as Satoshi was still active in forums, he/she/they had some interesting things to say about gold/PMs as currency, and how the metals compare to their new digital creation:
It’s the same situation as gold and gold mining. The marginal cost of gold mining tends to stay near the price of gold. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange.
I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.
In another thread from August 2010, Satoshi posted the following:
As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
boring grey in colour
- not a good conductor of electricity
- not particularly strong, but not ductile or easily malleable either
- – not useful for any practical or ornamental purpose
and one special, magical property:
- can be transported over a communications channel
If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.
Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.
I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.
(I’m using the word scarce here to only mean limited potential supply)
More on the founder, Satoshi Nakamoto, in the poorly-titled 2011 piece “The Rise and Fall of Bitcoin“.