I guess in a literal terms bitcoin is based on nothing but there is reason why it has value. The main idea behind bitcoin is that it is a decentralized currency that can't be inflated by a government. There is a fixed amount of bitcoin in existence with a small percentage that is added each year. What makes bitcoin legitimate is blockchain technology which verifies bitcoin transitions so that one bitcoin can't be "spent" in 2 places at the same time. In order to complete the blockchain, the bitcoin mining computers are used like what is described in TomH's linked article.
What I find appealing about bitcoin and other cryptos is that it is not going to be devalued like the dollar is since there is a fixed amount of bitcoin. Also appealing is that government has no control over how bitcoin is used, ie- the freedom convoy situation.
Which brings me to my current economic theory. Putting my tin foil hat on, I believe that the politicians and bureaucrats that run the US government are purposely spending as much money as possible. They actually want inflation so they can crash the dollar. Once they do that they will say ooops, our bad, we need to implement a new currency in order to get hyperinflation under control. So they will mandate that within a timeframe (like 1 year), you will have to convert all your USD to a new Digital US Dollar (which has already been talked about). Once they have the digital US dollar, that gets them to their coveted cashless society where they have complete control over the monetary system. Then they can use ESG (environmental, social, and governance) scores to decide your credit worthiness, and makes it much easier to stop dissidence like what we are seeing with the Canadian truckers because they can simply lock you out of your bank account.
If this theory plays out (which I pray it won't), I would be surprised if they do not try to regulate bitcoin and crypto out of existence. I dont know if they will be able to, but for now it is another safe haven like gold and land to diversify your assets.