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Comment by douglaswlance | Hacker News Reader

Crypto skeptics always discount the value of the network.

>If speculators were to have a collective moment of doubt, suddenly fearing that Bitcoins were worthless, well, Bitcoins would become worthless.

It wouldn't though. The bitcoin network itself has a non-zero value.

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What's the value of the bitcoin network itself (its computing power?), and how does the holding of bitcoins give any right on this value?

That's like asking, "what's the value of TCP/IP?"

Well, the value isn't really TCP/IP, it's the network (i.e. the internet).

Bitcoin isn't the valuable bit. It's the network of millions of nodes that has value.

Value is subjective. But you could say that the Bitcoin network has a price: the sum of the price of the miner hardware and electricity usage.

Yes, well, I can imagine that under the assumption that people loose "faith" in Bitcoin, it's still possible to assign a "value" to the Bitcoin network, e.g. the hardware that makes it (miners and nodes) -- I wouldn't count the electricity usage as part of its value, though. But the point is that holding units of Bitcoin, i.e. knowing the secrets that allow spending them, does not give any rights on those hardware assets, so the value of the network cannot provide a lower bound to the value of Bitcoin units, in the same way that industrial or jewelry usages of gold does give it a lower valuation bound.

That is not so clear. The Bitcoin network can easily be devoured by another cryptocurrency, if that other currency provides greater returns for a unit of work. The larger network within the crypto ecosystem may well have value, while affording zero tethering to any particular currency.

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