Value Is Not a Physical Thing

Stop Confusing Physical with Real

The other day I listened to a podcast with the founder of the world’s second-largest real estate tokenization company.

A full hour on how a building in Madrid, an apartment in Miami or a retail space in Lisbon can live on a blockchain. Fractionalized. Liquid. Transferable in seconds. No notary, no registry, no friction.

I closed the episode thinking exactly what I thought the first time I opened ChatGPT back in 2022.

This is another revolution.

And I remembered a line from Larry Fink, the man who manages over ten trillion dollars, saying, plainly, that every asset in the world will eventually be tokenized. Not some. All of them.

The curious part is that most people still think digital is somehow less real than physical. That tokenizing is, in some way, diluting. That an asset on a blockchain is more fragile than one written on paper and filed at a registry. That Bitcoin can’t be worth anything because you can’t touch it.

And this is where the whole argument collapses.

Because if you look at the world as it actually is in 2026, physical is already the exception. Documents live in the cloud. Contracts are signed through DocuSign. Money your money, the money you think you have in the bank is over 90% digital. There is no box of bills with your name on it at the branch. There is an accounting entry in a server. A row in a database. Bits.

Music stopped being vinyl. Films stopped being tape. Books stopped being paper. Photos stopped being developed. Maps stopped being printed. And no one, at any point, felt their music was worth less because it lived on Spotify.

Physical has been retreating for decades. It’s just that now it’s money’s turn. And real estate’s. And equities’.

Saifedean Ammous published an essay a few days ago that pointed at exactly this. And he took it somewhere deeper: into the territory of value itself.

His argument is simple and devastating. Take the seven most valuable companies on earth (Nvidia, Apple, Tesla, Microsoft, Alphabet, Meta, Amazon) and calculate what percentage of their market capitalization corresponds to tangible assets. Factories, buildings, inventories, machines. Things you can touch.

The result: less than 6% on a weighted average. For Nvidia, less than 1%.

Translated: if tomorrow you liquidated every physical asset of the seven most valuable companies in the world, you wouldn’t even reach 6% of what they’re worth. The remaining 94% is something else. Brand. Technology. Data. Knowledge. Network. Network effects. Expectations of future cash flows. Intellectual property.

Intangible. All of it intangible.

And here comes the uncomfortable part for anyone who dismisses Bitcoin for not being physical: the market already decided, decades ago, that 94% of the value of listed companies doesn’t need to be physical to exist. The market has already voted. With trillions of dollars. It voted when it bought Apple at multiples that had nothing to do with its factories, and when it put Nvidia at three trillion without a single physical asset to justify it.

Carl Menger wrote it in 1871, when he founded the Austrian school. Value is not a physical or chemical property of a good. It is a psychic property. It exists in the consciousness of the subject doing the valuing. Outside that consciousness, there is no value there is only matter.

Oil was a nuisance in 1820. In 1920 it was the blood of the industrial economy. The same molecule. The difference wasn’t in the oil. The difference was in us.

This changes how you look at a portfolio entirely.

If value lives in consciousness, not in the atom, then the relevant question stops being is this physical? and becomes who decides this is worth something, and for how long are they going to keep deciding it?

A euro is worth something because a government forces you to use it to pay taxes. And because your bank only operates in that currency. The day that obligation dissolves and fiat obligations tend to dissolve on multi-decade horizons, the euro stops being worth anything. Not because it stopped being physical. Because the collective consciousness that was holding it up stopped doing so.

A building is worth something because there is a jurisdiction that recognizes your ownership of it, a market that recognizes its utility, and a legal system that protects that ownership. Take away any of the three and the bricks are still there. But the value isn’t.

Bitcoin is worth something because a global network of participants has voluntarily decided that this digital record: immutable, finite, neutral, unforgeable, is the best way to store value across time, outside the reach of the State. That valuation doesn’t depend on a government. It doesn’t depend on a bank. It doesn’t depend on the integrity of any jurisdiction. It depends on the monetary logic of millions of people who reached the same conclusion independently.

That is, probably, the most robust form of value that has ever existed.

And three implications follow from this for anyone building wealth over the next ten or twenty years.

First: the reflex of rejecting digital because it’s not physical is a 20th-century cognitive bias. It no longer describes the world you live in. Your money is digital. Your work is digital. A large part of your wealth, too. Refusing to see digital as real is, simply, myopia.

Second: the tokenization of real-world assets (real estate, sovereign bonds, equities, commodities) is not a crypto trend. It’s the next logical phase of a movement that has been running for decades. Larry Fink doesn’t speak for BlackRock. He speaks for the common sense of capital. Capital moves where there is less friction. And physical friction, against digital friction, already lost that war.

Third, and the most important: if value lives in collective consciousness, then the real question for your portfolio is which collective consciousnesses are hardest to break. The ones that don’t depend on a government. The ones that don’t depend on a currency. The ones that don’t depend on a jurisdiction. The ones that have already survived full cycles without anyone holding them up by decree.

Gold. Bitcoin. Certain world-class productive assets. Little else.

Everything else is, ultimately, a fiction sustained by someone’s political will.

Once you understand this, you stop worrying about what is physical and what isn’t. You start worrying about what is durable and what isn’t. And you realize that hardness isn’t in the atom.

It’s in the network holding it up.