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The bitcoin asset (BTC, or XBT) is dependent on its accompanying monetary system, made up of the Bitcoin protocol and the Bitcoin network.
All participants in the Bitcoin network share a common rule set, called the Bitcoin protocol, enabling each participant to keep track and effectively ensure the correct transferring of BTC. Within this system, BTC functions as an internal unit of account that can be transferred inside of the network, but the units have no existence outside of the network on which it relies.
Each unit is fully digital and is only held and transferred with specifically designed digital wallets. The process of creating a wallet, storing and moving bitcoin doesn’t require any involvement from any other individual, group, or entity other than the individual user.
As a fully internal unit, bitcoin can be transacted without counterparty risk, meaning it doesn’t depend on anything external to itself (credit or otherwise). It is also a digital bearer asset in that whoever controls the associated private keys, controls the bitcoin.