The Briton, whose battle with drink and mental health issues after the 2021 Tokyo Games has been well documented, said he had no regrets and Italian Nicolo Martinenghi deserved his victory.
"It's not sad at all," he told reporters at the La Defense Arena after finishing joint second with American Nic Fink.
He said that although he had woken up on Sunday morning with the "curveball" of a cough and feeling under the weather, he was not seeking any excuse.
"If you're willing to put yourself on the line every single time, I think there's no such thing as a loss. I'm so happy that the right man won it.
"I'm not defining myself by a medal. I define myself by my heart and what it's made me feel, what it's made me produce," he added. "It's got the best out of me.
"I think it's broken me, this sport, but it's also given me life."
Martinenghi's time was a relatively slow 59.03, far slower than Peaty had managed in the semi-finals and also in the British trials.
But he said it was about seizing the moment rather than the race time, and the Italian had done just that exactly when it mattered.
Peaty choked up, sobbing as he told reporters of his young son George's response.
"As soon as I see his curly hair, I'm like, I'm gone, I'm crying," he said.
"Any parent or anyone that has that love, it's just a different type of love, something that swimming can't give me anymore. And I don't want it to give me anymore.
"He normally goes 'Daddy, are you the fastest boy?' And I would have said 'Not today'. But he just says 'I love you, Daddy'. That's what I care about."
The silver was Peaty's sixth Olympic medal, equalling Duncan Scott's record for a British swimmer, and there are more to be won in Paris with the relays to come and Britain as serious contenders.
"I've still got a job to do on those relays, and tomorrow's going to feel a bit like a hangover because of the emotion," said Peaty. "But that's what we do.
"The win and loss doesn't really affect me any different, because the sun always rises the next day, and we've still got to perform in those relays now."
