Abacus

Constructing Value with Bitcoin

A common objection to Bitcoin is that it lacks the tangibility of gold. You cannot hold bitcoin in your hand, weigh it, or lock it in a vault. Advocates sometimes respond that Bitcoin is “backed by mathematics”—but this misses the mark. Mathematics is abstract. The objection stands.

The better response is simpler: Bitcoin is literally physical.

The Bitcoin ledger is not a concept floating in digital ether. It is a specific configuration of matter—electrons trapped in the floating gates of transistors inside flash memory chips. Every bitcoin you own, every transaction ever recorded, exists as physical states in physical hardware. With a sufficiently powerful electron microscope, you could observe these states directly.

What makes this unintuitive is scale—in two directions.

First, the ledger is unintuitively small. The entire record of every Bitcoin transaction since 2009 fits in roughly 500 gigabytes—less than a modern smartphone’s storage. This compactness makes it feel ethereal, but compactness is not immateriality. A gram of gold is small too.

Second, the ledger is unintuitively redundant. The same physical record exists on thousands of nodes worldwide, each maintaining an identical copy in its own flash memory. The nodes continuously verify that their physical states match. This redundancy creates the security property that matters: destroying the ledger would require simultaneously destroying thousands of independent physical copies scattered across the globe—and in orbit, where satellites broadcast the blockchain continuously.

The Bitcoin ledger, then, is not an abstraction represented by computers. It is a physical structure in computers—a configuration of matter that persists, that can be measured, that exists “out there” in the world as surely as a gold bar in a vault. The difference is that this particular configuration is replicated, synchronized, and verified across a planetary network of machines that collectively maintain its integrity.

When we speak of Bitcoin as a “physical scaffold” for economic activity, we mean this literally.

This book explores what follows from taking Bitcoin’s physicality seriously. If the ledger is a physical structure, and if humans are embodied organisms who interact with physical structures, then we can study the relationship between humans and the ledger the way we study any organism-environment relationship. We can ask what the ledger affords—what possibilities for action it offers to those who perceive it. We can trace how economic value is constructed through these interactions, rather than discovered in objects or inferred from preferences.

The result is a framework that sidesteps centuries of debate about where value resides. Value is not in the gold. Value is not in the mind. Value is constructed through transactions between embodied organisms and their environments—and Bitcoin provides a scaffold where these transactions leave permanent, verifiable traces.

We begin with what is physically there. The theory follows from the phenomenon.