“But Bitcoin isn’t real”

That’s the biggest objection I hear when talking about digital assets.

And while the perception of reality has not affected the exponential adoption of software, it has impeded the adoption of Bitcoin and the wider crypto complex. That in turn makes crypto secured verticals like tokenisation of real-world assets, difficult to adopt by those who feel that ‘real’ needs to have physicality.

What is real?

For many, if you can’t hold a ‘real’ object in your hand, see it on a wall or in a vault, or touch it like diamonds and gold, it feels like it doesn’t truly exist.

That said, gravity and physics are very real, and most of us are happy to put their lives in the digital hands of software, which also lacks physicality.

This isn’t just casual doubt—legal systems around the world are still wrestling with how to define Bitcoin. And while Bitcoin exists as code, or software, in the U.S., it is officially considered to be property for tax purposes and treated much like stocks or real estate. This means it has recognised legal status, and transactions are taxable events.

Meanwhile, in Australia, the ATO has long treated Bitcoin as property—subject to capital gains tax when sold, spent, or exchanged. That said, a recent 2025 court decision in Victoria raised the possibility that Bitcoin could be comparable to cash, potentially altering its treatment in the future. And the rub here is that if it were reclassified as a currency, it might no longer fall under the capital gains regime at all.

Taxpayer agendas aside, these machinations show that Bitcoin’s “realness” isn’t just a technological question, it’s also a legal and regulatory one.

But we’re not here to debate whether Bitcoin is property or currency for tax purposes—that's a legal question still evolving in courtrooms and tax offices. Instead, we’re going to explore a more fundamental one.

Is Bitcoin real? Because while regulators debate classification; users, investors, and builders around the world continue to treat Bitcoin as something very real. So, let’s venture beyond these debates to prove that Bitcoin is real, not in the traditional physical sense, but in every meaningful way that counts, socially, financially, and economically.

Here are the key reasons why Bitcoin exists, is real property, a usable asset, and in some countries, even money (legal tender).

What is Bitcoin, really?

Not all real things can be touched. Some of the most important things in life are intangible.

The money in your bank account isn’t cash, it’s just numbers in a system and the work you did or investment you made to achieve it, was transient and no longer exists. And in reality, fiat money is not durable since a central bank can print more of it with impunity, meaning that fiat can be easily and instantly debased in contrast to say, a diamond or bar of gold. If the world outlawed cash, would digital tokens in a banking system still be real? Of course they would.
A land title is just a document, not a piece of land and a share certificate is the same.
Goodwill and IP are human abstractions of very real forces which have the capacity to create competitive advantage and value, and while they can be recorded, they are intangible.
Influence, reputation, credit scores are all real, but invisible.

Bitcoin is like this. It’s not made of rocks, metal or paper. It only exists in software. But that doesn’t mean it isn’t real.

More correctly, Bitcoin is intangible, but real. Bitcoin cannot be seen in the physical world and does not physically exist, but it’s universally recognised and enforceable through code and consensus. You can’t hold it, but you can pledge it, spend it, send it, sell it, or save it and the value an owner derives from being able to support that utility is secured by math and scarcity, not metal. And that in turn is expressed through a consensus between thousands of computers all over the world which agree on who owns what.

The digital abstraction of all of these features and utilities, is enshrined in a public agreement, or software connected consensus that’s powered by cryptography (and electricity) and gives Bitcoin its real-world credibility, gravitas and reality.

Some other, but not all cryptographically secured digital assets and systems share these features, but we’re going to stick with Bitcoin for the purposes of the reality check below.

What makes Bitcoin “real”?

Here are seven key facets of Bitcoin’s reality.

1 Social construct and cryptographic enforcement

Bitcoin is like money or property, i.e., it’s a social agreement. But unlike traditional assets backed by a bank or government law, Bitcoin exists independently of any sovereign state, making it a sovereign asset. It’s a permanent, tamper-proof record of all transactions and is therefore immutable with this high level of security and trust enabled by cryptographic proof and its distributed validation network.

No one can fake it.
No one can double-spend it.
No one can take it away without your key.

It can’t be printed by governments, and it’s not enforced by courts. Instead, it is enforced by code and math which removes the need for buyers and sellers to check to see whether and with whom they can deal (permissionless and trustless).

2 Consensus-based asset

Bitcoin is a consensus asset—everyone in the network agrees on:

The rules.
The supply cap (maximum 21 million each divided into 100 million units, called a Satoshi).
Who owns what.

That global agreement gives it scarcity, integrity, and value, even without needing a central authority to run it.

3 Decentralised ledger asset

Bitcoin lives on a public, decentralised ledger (called the blockchain). There’s no file to download and no account to log into. You own Bitcoin by controlling a private key—a special password that proves it's yours. It’s a digital bearer asset, i.e., whoever holds the key, holds the coin. Anyone can check provenance on the ledger which exists on thousands of machines, in real-time, in exactly the same format across machines. Programmatic rules exist to ensure there can only be one source of truth blockchain.

4 Code-as-law asset (protocol-enforced property)

Bitcoin follows strict rules written in code. No bank can freeze it. No court can reverse it. No central power can print more. If you control the key, you control the asset. The software itself is the judge and the enforcer. That’s why it’s called “code is law.”

5 Ownership means rights to exploit

You don’t own a physical object—you own the exclusive right to use a piece of the Bitcoin network. Or put another way, you hold exclusivity over a position in a universally validated ledger that provides you with the optionality to exploit that exclusivity as the market evolves in many ways, where you can:

Hold it as a store of value in the face of monetary inflation/fiat currency debasement.
Spend it for goods or services.
Sell or trade it.
Pledge it as collateral.
Transfer it across borders with no permission.
Bitcoin gives you economic rights, just like owning land or shares, only it’s digital, borderless, and frictionless.

6 Economic utility, why it matters

In some places, the financial system doesn’t work well. Banks are unstable. Money loses value. People get cut off. Bitcoin solves real-world problems because it’s:

Inflation-resistant.
Portable and secure.
Open to anyone with a phone (or internet connection).

Bitcoin is financial self-defence against fiat currencies and fiat denominated assets, existing in digital form. That’s why it has real economic utility, especially where trust in money or institutions is low. As the global money supply increases, the supply of Bitcoin does not.

7 Legal tender and the final step toward “Real Money?”

Bitcoin is already “real” in both a technical and economic sense. However, when a government allows you to pay taxes with it, that marks a significant legal milestone known as legal tender status, where the sovereign/state formally recognises it as official money. Being able to cancel debts to the government in Bitcoin means it becomes money by law, not just by code.

El Salvador made Bitcoin legal tender in 2021. This meant that citizens could pay taxes in Bitcoin, businesses were required to accept it, and it gained equal status alongside the national currency.

While this transition has come with teething problems, including volatility concerns, and regardless of personal opinions, it marked Bitcoin’s formal entry into the realm of legal money.

Philosophically, though, this was not Bitcoin’s original intent and in many respects the push to establish it as legal tender may challenge its status as a sovereign asset and a “flight to safety” store of value.

Some Bitcoin reality you can take to your Ledger

Bitcoin is code, but that code creates real economic property. It’s as intangible and real as the digital credits in your bank account, and software. It’s governed by math, not people. The ledger it lives on is immutable, making it a permanent, tamper-proof record of all transactions. It’s verified by consensus, not trust in a government edict. And it’s enforced by software run by validators (Bitcoin miners), not courts.

It remains ‘on’ 24/7, thanks to those miners, which are financially motivated operators who secure the network and keep it running in exchange for Bitcoin. And that way, their incentives are tied to its integrity, making them guardians of the very system that pays them.

You can’t touch it, but you can own it, secure it, use or pledge it, spend it, or save it and if you save it, you have yourself a nice hedge against monetary inflation/currency debasement. That’s bucket loads of utility. And if your government accepts it as a means to cancel out your tax liability, it becomes real money, legally, not just digitally (although that is not necessarily a desirable outcome).

Its value (not its price) springs from all of this, and from its scarcity, and the reality that in a digital world, what matters is not what’s physical, but what’s useable, transferable, exchangeable, enforceable and trusted. And by those measures, Bitcoin is very real.

Price it how you will, or not, but there is real value there.

See you in the intangible market.

Mike

a reality check on Bitcoin