TLDR; Currencies and accounts are just ledgers. Bitcoin is a ledger with some unique advantages, despite some shortcomings. One of those advantages are self-ful

TLDR; Currencies and accounts are just ledgers. Bitcoin is a ledger with some unique advantages, despite some shortcomings. One of those advantages are self-fulfilling, if enough people use it for that: reserve value with a bias toward growth in value (deflation). More people are betting on that case, so it may fulfill that role. Or not. LONG VERSION I think the best way to explain Bitcoin is to point out that all currencies and accounts are ledgers. The Bitcoin ledger has advantages over many pre-existing ledgers and accounts: - No third party oversight or permission required to use it - Users can create as many accounts as they want - Users can manage their accounts directly - Units can be sent by anyone to anyone, from anywhere, at any time - Fast compared to some transaction types (wire or bank transfers, etc.) - Inexpensive compared to some transaction types (wire transfer, etc.) The current weaknesses of the Bitcoin ledger are: - Still slow compared to some transaction types (cash, VISA, etc.) - Expensive compared to some transaction types (cash, VISA, etc.) - Has a leaky privacy model. Other subsequent cryptocurrencies have mitigated those weaknesses, so Bitcoin is not the state of the art. BUT two other advantages seems to have given Bitcoin a valuable role despite its inefficiencies: - Rapidly diminishing unit production, with a hard maximum of units. So its total supply cannot be inflated. This was an innovation, since other currencies and assets can have their supply inflated by their managers or producers. It implies that as the ledger is used by more people, to store more value, the units will maintain and increase in value. I.e. deflate instead of inflate. This makes it suitable as a reserve currency IF enough people accepted it as a standard way to do so. - AND Bitcoin has first mover and the greatest recognition advantages over subsequent cryptocurrencies, giving it unique advantages as a standard So far, the self-fulfilling trend appears to be happening. There are a growing number of people using it as reserve value, or at least own it speculatively based on its future use as reserve value, or at least speculatively based on the idea that people will continue to speculate on its reserve value .... So it has a clear use, that may be coming to pass.