Nothing. It's a valuable asset with use cases so it doesn't need to be backed by anything.
it is valued
as money. Most gold ever mined by humanity sits unused in vaults. Oil is very useful, and it doesn’t sit around long before being used. The majority of gold is never, and will never be used for anything except as money (which is the most useful, most desired good by definition: money)
Gold itself is sustainable and people would have the option to redeem their paper notes for gold.
Why is it sustainable as money?
Because it has properties that reinforce its credibility as money. Gold has to be mined, at great cost to human time. It can’t be destroyed, doesn’t degrade, and is economically dense (rare). If alchemy were ever successful, the value of gold as money would disappear. It would no longer be able to enforce its monetary rules.
Paper money was backed by gold to give it credibility as money. Paper money can be created costlessly, therefore is not a credible money unless it is exchangeable for something that does have a physical restraint on counterfeiting. For centuries people tried via alchemy, but gold continued to enforce its monetary policy.
There is probably a way to integrate both in the same system. Silver is great for coins.
Gold is better to use because of its efficiency. The price is more stable. The price is also much higher, so fewer ounces need to be stored by banks.
Gold is economically dense as money. A prison wallet can probably hold 10 oz of gold…you could get $20k USD worth across a border, if they don’t do a cavity search.
Bitcoin is inifinitely dense. The neurons in your brain can hold $billions in value, all massless. With Bitcoin, every single aspect of gold is improved on, exponentially.
Maybe there wasn't any other option. I'm not sure. I would need to do more research on that topic.
My thesis is money becomes such because of its specific properties that make it good at being money, not tertiary properties that have nothing to do with functioning as money.
