Paper money is only limited by earth's supply of trees 
At least digital currency is "backed" by the mining's ever-soaring level of difficulty. This built-in scarcity model prevents deflation of bitcoin value, raises the miners' bar for return on investment, and thereby guarantees a steady climb in price. Each transaction buyer wants to hold for a later price rise, and so on down the line. Not every trader can outwait their own need for their own fiat currency, so naturally there are trades at a loss. Whoever has the most patience and greatest wealth can end up with a large hoard of bitcoins
At least digital currency is "backed" by the mining's ever-soaring level of difficulty. This built-in scarcity model prevents deflation of bitcoin value, raises the miners' bar for return on investment, and thereby guarantees a steady climb in price. Each transaction buyer wants to hold for a later price rise, and so on down the line. Not every trader can outwait their own need for their own fiat currency, so naturally there are trades at a loss. Whoever has the most patience and greatest wealth can end up with a large hoard of bitcoins
Good paper money is made from cotton, it is more durable overall
Other than that, no digital currency (Bitcoin or whatever) is backed up by the mining difficulty. It is equal to saying that Bitcoin (for example) is backed up by miners' cost of mining. This is as alluring an approach as it is misleading. Value of anything is backed up by its usefulness alone (otherwise known as utility), and if Bitcoin loses its utility (whatever it might be, speculative or transactional), mining costs will quickly become irrelevant (and ironically, mining difficulty will decrease soon thereafter)