I am looking for an explanation about the value of bitcoin in relation to what it is used for.
If bitcoin is simply bought and sold on an exchange, it doesn't add any value to anything and, presumably, if all the bitcoins that are bought are sold again it works out to be even (ie no value is created or lost, other than fees to market operators etc).
However, if I buy my groceries with bitcoin and then consume those groceries, have the bitcoins that I used now 'absorbed' the value of those groceries (ie the bitcoin are indeed worth something)? I can't reverse the store of value in bitcoins, unlike on a market where buying and selling is almost a direct conversion of value. Does the trade of goods and services which cannot be easily 'undone' have the effect of 'storing' the value of those goods permanently in the bitcoin economy?
Is this roughly the right idea or am I missing/misunderstanding something in this basic economic concept?