Money must be physical because it must be a commodity - it arises out of real exchange in the market of real goods. You could not have a leader create some new paper currency out of nothing and impose it - how would anyone know what prices to charge?

See Mises' regression theorem - the value of BTC derives from fiat which derives from gold which derives from the physical use to which gold may be put.

If aliens came & reprogrammed our brains to find gold ugly & useless (for jewelry, filling teeth, scanning electron microscopes, etc) then I would predict it's market value (as measured in oil or salt or meat etc) to drop dramatically.