Prior to Bitcoin there were no shared public data stores that satisfied these requirements. Bittorrent and Freenet are not guaranteed to have data availability. That is, you can't always get what you stored. DHTs only work when they are centralized and are susceptible to a number of different attacks when operated with general public access.
The only way to interact with this data store is by being in control of Bitcoin. That is what gives value to the units of account.
On the other end of that, processing, not data, there are distributed processing projects out there finding the optimal golomb rulers, looking for pulsars, how protein folds etc. There could be value in a distributed project processing these and other projects. All of Bitcoin processing is self-referential though, it does not allow for this potentially more valuable processing.
What you're describing would be valuable, but not if the only data storable is self-referencing. People don't buy 1 terabyte disk drives that already store Bitcoin blockchain history. They pay for hard drives because they will store the information they want to store and retrieve on them.
https://www.coinprism.info/address/1BvvRfz4XnxSWJ524TusetYKr...
https://blockchain.info/new-transactions
I personally believe that there is intrinsic value in just the self-referential nature of Bitcoin transactions but what's important to realize is that the transactional nature of Bitcoin is what allows for the entire system to work, regardless of what is built on top of it.
A basic transaction of "A sent X to Y" might not be as valuable as a poem, but it still has some level of value.
If digital currencies focused more on this type of thing, they might actually stay around for a while longer. This is something I can see the value and usefulness of. A Bitcoin competitor focused around things like this, and perhaps allowing people to pay for non-blockchain mass processing power, might actually be viable in the long term. Because it would be actually useful and valuable.
Bitcoins protocol was SPECIFICALLY DESIGNED to allow these kinds of services. https://en.bitcoin.it/wiki/Script
It is exactly what you say it should be.
There is an incredible amount of infrastructure built up around Bitcoin. There are currency exchanges all over the world. There are thousands of software libraries and applications. These network effects are very real.
The only way to build the types of extensions that you deem valuable are on top of the existing primitive infrastructure.
It's a shame that there is so much political rhetoric clouding the the real value. It kept me from discovering this stuff for the longest time!
Reality does not yield to arguments of the contrary.
Your examples contradict your first point.
Tulips have value today, a lot less than the bubble. Sacramento real estate has lots of value today. Pets.com was worth something even when it went bankrupt, even as little as it might have been.
$4.3 billion isn't a very big bubble besides. Not even a drop in the ocean of global currencies.
>It's understood that that gold still backs US currency, in a more abstract, unpromised way.
This has nothing to do with value. Gold is almost completely useless - its value is overwhelmingly due to speculation. Dollar is backed by enforceable debts. No better backing is possible. With gold, you're only hoping that somebody will buy it from you, for unclear reason.
Of course, that hasn't stopped people from creating ponzi schemes using bitcoins either.
Bitcoin is a ponzi scheme. That people think they have any value shows they have a fundamental misunderstanding of value. This group might include a lot of people, but the number of people who owned over-priced houses in 2008, or dot-com stock in 2000 was large as well.
HN'ers talk about how they are sober, logical, rational people who can see business (and engineering) opportunities that "traditional" business and finance can not. So Bitcoin is a good lesson in this regard, since the snake oil seems to have infected Silicon Valley like some west coast est cult, with lots of major VC's singing the praises of this scam they are running. Even people not interested in Bitcoins should pay attention to this aspect of Bitcoins, as familiarity with these scams is useful. You can see major VC's lying about the future of Bitcoin, the cluelessness of so many people here and so forth. Aside from understanding scams, you'll understand that there are some people, such as myself and others talking about tulips and ponzi etc., who understand the concept of value. The people hyping the Bitcoins, which will inevitably go to $0, do not understand value, but despite this, nothing will really change. The majority will still listen to the big VC and angel con artists peddling this type of scam, those of us who were prescient about it will be ignored - though inevitably proved wrong on Bitcoin, the VC scammers will still be considered "right". This will be one of the more instructive lessons, not that of Bitcoin. One of these more instructive lessons is that the VCs are fundamentally wrong about why a currency or commodity has value. We understand value, they don't, but that knowledge only helps us avoid scams like Bitcoin for now. They hold the microphone and those of us who are right will be marginalized even when proved correct. It's kind of like how Richard Dawkins, who is correct about reality, logic, Christianity and so forth, is a marginalized figure, because preachers shaking down their congregations for tithes and money are who have the microphone and the power. But in this case we're not talking about delusions infecting uneducated, rural yokels, we're talking about delusions that infect the educated, well-to-do denizens of the Bay Area. Bitcoin is down 7% today, and way down from last November, when Bitcoin was trading at $1160, and no matter how much the bagholders on HN downvote my karma, nothing will stop Bitcoin's drop from that $1160 peak last November to today's $326, to it's inevitable proper price of $0.
I've talked about WHY Bitcoin is worthless in previous posts, but to reiterate - the question is WHY is Bitcoin valuable? Ask that simple question before buying a Bitcoin, or spending thousands to get an ASIC on backorder (the major Bitcoin ASIC sellers, Butterfly Labs, were raided by the feds recently due to fraud). There is no answer. "It's valuable because people are buying it right now" is not a real answer. You could say that about new Sacramento real estate developments in 2008, or Pets.com stock in 2000. It's a tautological argument - if people are buying it for $326, according to that theory, it's worth that because people will pay that, if it drops to $2, it's worth that because people will only pay that. It's a tautological argument.
Commodities have a real value. Real, long-term currencies are just commodities with traits that make them good currencies. The traits are things like durability, portability, uniformity and divisibility. People have been trading for thousands of years, so what has been a currency for thousands of years? Gold has been one of the most popular - not because it is different than other commodities, other than those mentioned traits which make it a good currency. All of the precious metals make decent currencies.
Half a century ago US currency was paper with no inherent value, but with the promise that one could trade it for gold that was held in Fort Knox and other places. So through all these thousands of years, currency was tied to a real commodity, a precious metal. Bitcoin does not have such a link.
Of course in 1971, Nixon broke the link between Federal Reserve notes and gold. Other major currencies followed suit. Some Bitcoin advocates point to that event and say Bitcoin can float on thin air as well. Why that is not so is too much to go into in an HN comment. Suffice it to say, the US government holds over 10,000 tons of gold in Fort Knox and other places. If US currency ever began to collapse, a simple announcement that dollars were convertible to that gold at a certain price would stabilize the currency. Why does the US government spend all that money to hold 10,000 tons of gold? It's understood that that gold still backs US currency, in a more abstract, unpromised way. There are no 10,000 tons of gold backing Bitcoin.