In other words, there is no particular technical or legal feature of Bitcoin to differentiate it from another system. Bitcoin just happens to be the most popular and receive the most press.
If you cannot identify a particular, distinguishing feature of Bitcoin that accounts for its popularity, why should we believe that this is not a bubble?
I could make teddit.com, a reddit clone by copy & pasting their entire git repository at https://github.com/reddit/reddit. But I doubt anyone would use it, because of network effects. The same thing applies to bitcoin.
Your point is undermined by the fact that reddit hasn't lived up to its hype (and I believe its estimated valuation has gone down lately). Myspace was supposed to be worth hundreds of millions of dollars a few years ago. A large current userbase does not a stable value make.
That's like saying "what differentiates Facebook from other social networks? It just happens to be the most popular. What is stopping someone from creating a better social network, resulting in a migration away from Facebook?"
Can you identify a particular, distinguishing feature of Facebook that accounts for its popularity? You can, but many modern day competitors have most of the same features, plus additional ones. Everything that they do is pretty easy to replicate.
Both Bitcoin and Facebook may be outcompeted some day in the future, but that doesn't make them bubbles.
1) People with investment in hashing power tend to hash on bitcoin
2) If another coin were to come along (as they do, ask me about Terracoin) the speculators would find it.
3) The coin would be vulnerable to attack from those speculators who control even a tiny fraction of the hashes of Bitcoin.
I'm not just talking about double-spend, I mean someone (or several someones) with a large amount of hash power (say, each individually much smaller than 51% of total) coming along to service the network for a short while, driving up the difficulty, and getting away with a lot of coins while actually processing transactions for a comparatively short amount of time.
TRC, as a network with usually several terrahashes[2] hashing constantly, had to implement some controls[4] to prevent this kind of attack.
When the coin is more profitable to hash, the speculators find out, they bring their hashes, and it drives the difficulty up.
When the difficulty goes up, a slog ensues (the per-hash temporary advantage of mining Terracoin dries up) as the speculators take their hashes elsewhere and the remaining sloggers have only to hope that they can provide enough TRC at low cost[3] such that there is never an advantage to speculators, and thus the network can experience organic growth bringing in more permanent hashes from those who support its development.
The controls only limit the mobility of the difficulty (it can't shift up by 4x or down to 0.25x of the last retarget)
So when the slog is particularly bad (high difficulty), or when the hashing hordes are particularly voracious (low difficulty compared to coin price)... instead, it can increase to 1.25x or decrease to 0.75x -- you have to watch the network pretty close to see when people are getting over on profitability, but when they do you can still feel it for days.
The effect of not being the largest network seems to be that your difficulty goes up and down, not always just up up up. It's hard to find long-term difficulty reporting.[1]
Of course when bitcoin spenders are willing to wait up to 10 minutes for blocks, and Terracoin targets 2 minute blocks, even "network's running slow" seems pretty fast in relative terms, as long as it's not uncontrolled adjustment.
They must be doing something right, they're still/currently the most profitable Alt-SHA256 coin, even if the share prices have taken a serious dump.[5]
PPC has better features than BTC, but people haven't heard of it yet[1]. That said, BTC may win by being "good enough" and having a strong network effect.
