What Is Bitcoin Backed By? Why Code and Energy Replaced Gold

Bitcoin and gold are often compared because both are viewed by some investors as alternatives to traditional money. Gold has a long history as a monetary asset, supported by its physical properties, scarcity, and demand across jewelry, industry, and investment. Bitcoin takes a different approach: it exists digitally and relies on cryptography, a predictable supply schedule, and a decentralized network to operate. This raises a common question: if Bitcoin is not backed by gold or a government, what gives it value? The answer involves several factors.

First reported by UseTheBitcoin. This page is a short excerpt; the full text is theirs.