However, if people weren't out there using it for real-world transactions then it would have no value at all.
And there will always be, because electronic cash has a tangible value on its own. But not for all people, again. Some people don't care about that, and are quite fine with electronic fiat, alone. For them, electronic cash represents nothing more than an investment – an asset appreciated in practice solely by the faction that truly esteems the concept of electronic cash.
I'm just referencing Satoshi's original intentions.
Even though I don't care much about Satoshi's intentions, I'm just going to quote two parts where he's pretty much arguing it's more than currency;
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)
What the OP described is called "cornering the market". When someone tries to buy all the world's supply of a scarce asset, the more they buy the higher the price goes. At some point, it gets too expensive for them to buy any more. It's great for the people who owned it beforehand because they get to sell it to the corner at crazy high prices. As the price keeps going up and up, some people keep holding out for yet higher prices and refuse to sell.
It will remember Laszlo Hanyecz, Silk Road & others who established its first use cases.
Honestly, I don't give a damn about being in history. I wouldn't want to be the known one who traded 10,000 BTC for two pizzas.
