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

Key Takeaways Bitcoin is not backed by gold, government reserves, or a promise to redeem it for another asset. Its market value depends on demand, scarcity, security, and adoption. Proof-of-work mining uses electricity and computing power to make transaction history expensive to alter, helping secure the Bitcoin network. Bitcoin's protocol limits its supply to approximately 21 million BTC, with new issuance declining through scheduled halvings. Independent full nodes verify transactions and enforce consensus rules, preventing miners from creating invalid bitcoins or unilaterally changing the protocol. Bitcoin's value is not guaranteed.