One could argue that the USD is at least partially backed by its ability to discharge real tax obligations. But bitcoins truly are purely fiat in nature (they have no intrinsic use in either consumption or production). Does this mean that the value of bitcoins must eventually crash to zero (their fundamental value)? No.That is to say, modern money is not only chartal, after Knapp, but also social credit, as Innes observed. Since money is chiefly information, digital money can serve the purpose of money if certain conditions are met. Andolfatto is mildly positive about Bitcoin in this regard.
Bitcoins are information -- record-keeping devices. You can't eat my credit history either, but some companies would value (and pay for) this information nevertheless. So as long as Bitcoin conveys accurate information, its value can persist indefinitely.
A bit more on the economics of Bitcoin
David Andolfatto | Vice President, FRBSL
Chicago Fed Letter
Bitcoin: A primer
François R. Velde, senior economist