[neilwilson]

"It's fundamental value is essentially nil,"

That's not strictly true. It's fundamental value is the effort required to obtain it - which at the moment is some rather large amount of electricity and hardware. If you have deployed those resources you will not let the Bitcoins go for any less in real exchange unless you absolutely have to.

That is the same for anything that is a currency. It's base value is what you have to do to get it.

The problem with crypto-currencies is that nobody has to hold them to deliver them anywhere. There is no solid drain other than to savings.

[RyanCavanaugh]

You've confused fundamental value with fundamental cost. A hand-knit sweater will not necessarily (or even usually) fetch a selling price equal to the input value of the labor that went into it.

There are many endeavors which produce goods whose market-clearing price is below the value of effort required to produce them.

[mywittyname]

Houses are a good example. When land is plentiful, the cost of a house is usually a slight discount over what it would cost to build a similar one for new.

[SHOwnsYou]

Your first paragraph basically describes the sunk cost fallacy. People have put money in, so they will make sure the value doesn't drop below their investment.

[SamPatt]

This is the labor theory of value and proven wrong. All value is subjective.