We don’t know exactly, but it’s primarily prenatal hormones. Pretty much every marker we have for that, along with random gender linked stuff show a difference in straight/bi/gay individuals. There’s a genetic component, at least for men. But it’s not a simple inheritance case like or bloodtypes. A gay man identical twin is twice as likely to be gay that a fraternal twin (50 vs 25%).
Environment might have a say in how one expresses sexuality but it has nothing to do with their actual sexuality. A lot of people have some memory of their sexual preference being established very early in life, despite being too young to understand or even feel sexual attraction. I grew up in an environment where being gay was not an option, so even though I clearly wasn’t straight it took me until I was 16 to even realize it. My first crush ever was for a guy friend of mine a whole 8 years earlier and yet I never thought about it until my late teens.
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