The Dematerialization of Value

I was recently asked, “How can Bitcoin, which is not physical, have true value?” While this question erroneously assumes fiat currencies like the U.S. dollar have true physical traits, I decided to take it on from a different perspective.

My Response:

Bitcoin is simply the dematerialized form of money or value. Things we value have been going through a process of dematerialization for a while now. Music on vinyl records went to music on cassette tapes, then CDs and millions had access to this form. Today, music is non-physical. You can’t touch a single song or album today, yet music is accesible to not millions but billions, much more than ever before.

Movies, which moved from physical theaters to Blockbuster Video were watched by millions. Now they are digital (non-physical) via Netflix and a slew of other streaming services and are accessible to billions.

Mail moved from millions of physical letters dropped in mailboxes each day to billions of non-physical emails sent and received per minute.

Amazon helped dematerialize books and the entire retail shopping experience. Google dematerialized information and knowledge. When is the last time you physically went to a library? Remember the dozens of photos you stored in three or four albums under your coffee table? Today I can hold more books in the palm of my hand than the biggest libraries on Earth and the photos I keep in digital form exceed tens of thousands.

One can say that Bitcoin has come into existence to first dematerialize gold, which is the world’s old, analog version of value. Gold today is not unlike the dated photo albums that used to hold your most cherished moments. It no longer fits in a society that has gone digital with all things of value.

Just because you can’t see or touch value today does not mean it is not real. In fact, it actually means it’s more real and more valuable. Don’t we value the non-physical things in life far more than the physical ones? Love, faith, hope, decency, truth, honesty, justice: these things hold our highest value and worth as human beings, yet they can’t be touched, felt or seen. They are non-physical. Hasn’t much of the human race moved from the worship of physical gods like the sun or a statue to a god that has no physical form?

I can go on and on but I won’t. What I will say in closing is this. It should not be forgotten that the digitized or dematerialized form of a thing always becomes exponentially bigger and more valuable than the physical form it replaces. Netflix is bigger and more valuable than Blockbuster ever was or could be. Amazon is more valuable than all physical retailers combined. Bitcoin, a $1 trillion asset today, is the dematerialized version of gold which is currently an $11 trillion asset. In my view, this means only one thing. Bitcoin will continue to rise in value, ultimately to become exponentially larger than gold, its analog predecessor. But it’s even bigger than that, because Bitcoin is not just gold’s replacement. It’s the dematerialized form of ALL property/value. In the same way that music, movies and email are accessible to every human being on Earth with internet access today, Bitcoin makes property/value rights accessible to every human being on Earth with an internet connection today.

Bitcoin’s future is literally infinity itself. I’d get some if I were you.


Professional trader for 35 years; Author of 5 best-selling books on the topic of trading for a living; Educator; Speaker; Bitcoin Hodler

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Oliver L. Velez

Professional trader for 35 years; Author of 5 best-selling books on the topic of trading for a living; Educator; Speaker; Bitcoin Hodler