Money is a human construct that rise up from exchange of goods and services in society.
1. Medium of exchange
When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.
2. Store of value
Money must be able to be reliably saved, stored, and retrieve. The value of the money must also remain stable over time.
3. Unit of account
You can easy count in that. Money acts as a standard measure.It is necessary for developing efficient accounting systems.
Tiers -GREEN,ORANGE, RED
There are three function of money. I choose another three key attributes (Potential, Adoption, Power of third side) to help evaluates each form of money candidates. There are three tiers, GREEN, ORANGE and RED. Tiers of these 6 attributes can change in time. Usually you want convert your work and effort to something recognizable, rare, widely accepted, verifiable, easy dividable, fungible, transferable, durable, stable and collectible. From properties of money are mentioned five most important : dividable, durable, verifiable, transferable and rare. These tiers are fixed in time by nature of money candidates. Green 1 point, Orange 2 points, Red 3 points. Points are summed up and divided by 11 (attributes), result is SCORE (overall value). Less SCORE == better money. Nothing is perfect, this index should help you to choose right way. Please don't take this SCORE and site too seriously, it was created for fun and basicaly not showing nothing new.
GOOD,AVERAGE,BAD tiers of money
Usefull fiat money(e.g. Dollar)
1. Medium of exchangeAverage. These days are fiat money widely accepted around whole globe. In western world amount of cash, which you can have in your pocket is limited. SWIFT mechanism control capital flows and KYC/AML systems restrict money from using it
2. Store of value Average and still worse in time. Central banks mostly "target inflation" around 2%, but often it's more in some countries.
3. Unit of acountGood. Almost everybody has accounting in dolllars (or others currencies, eg. Euro). 93% of all money are non-psychical. Rest 7% are coins and banknotes.
Potential, trendAverage. In world are used government printed money, but since 1971 we are slowly coming to the end of that era.
AdoptionGood. Most population on world know how to use this type of money.
Power of third sideBad. In 21st century after mass adoption of global decentralized network (internet), power of institutions like banks and governments on monetary system is still too high.
DividableMost money are in computer so it is easy dividable. Coins and banknotes have exact value.
DurableCoins are pretty durable and banknotes have also solid durability.
VerifiableModern banknotes have many security features, it is hard, almost impossible, to fabricate it. In digital form it is even harder.
TransferableAverage. It is problem because, in online world, you need trustworthy intermediary in that process and this subjects are under political pressure. Cash is peer-to-peer, but it disappears with time.
ScarceBad. Amount of money in economy depends only on decision of central banks and authorities.
Score: 19/11 = 1,72
Precious metals(e.g. Gold)
1. Medium of exchangeBad. We do not use gold coins and gold credit account is rare thing.
2. Store of value Good. Gold tradition as a valuable material is thousands years old..
3. Unit of acountAverage. Today we do not have gold coins and your bookkeeping is not adapted to use gold as account records.
Potential, trendAverage. Holding gold is known as a safe harbor for most people in the world. Gold slightly gain value in long term.
AdoptionGood. Everybody on planet knows gold. money.
Power of third sideAverage. If you have larger amount of physical gold you must trust somebody else to protect it. Small amount is storable.
DividableAverage.You can melt gold to a limited amount and create coins.
DurableGood. Gold and silver are pretty durable.
VerifiableAverage. On first look it's easy to recognize gold, but u need special tools how to check exact purity of gold.
TransferableIf you transfer bigger amount of gold it is always dangerous and expensive.
ScarceGood. Gold inside of earth is limited amount, but not has absolute scarcity.
Score: 20/11 = 1,81
Bitcoin
1. Medium of exchangeAverage. These days you must find places where you can pay with Bitcoin. Bitcoin is designed to be peer-to-peer system, but today this function is little behind "store of value" function.
2. Store of value Good and still better in time. Value of bitcoin depends only on his demand. Supply rate is fixed and ends on 21millions. It makes this money pretty rare like a gold. Minus is only 17 years of history and high volatility in short term.
3. Unit of acountBad. It is easy to count, but cause of volatility it's not reliable. You probably do not your bookkeeping in bitcoin yet.
Potential, trendGood. Potential of non- government decentralized money system for world population is just enormous. Based on exact mathematics principles, not under decision of some people. Unbanked people can get bank in their pocket(smartphones).
AdoptionBad. Adoption of bitcoin is still in their beginning. We are probably on edge between "early adopter" and "early majority" phase. money.
Power of third sideAverage. It is because most people still buying bitcoin on centralized exchanges, but if you install wallet on smartphone, you can remember 12(24) words in your head and your wealth can't be seized, frozen or transferred by anyone. It puts individual responsibility on every human. Remember: Your keys, your coins. Not your keys, not your coins.
DividableGood.1 BTC you can divide to 100 000 000 Satoshi. With Lighting network you can divide even more.
DurableGood. Fully digital money, what you can't touch that you can't destroy.
VerifiableGood.You can verify with full node on your computer.
TransferablePeer to peer from definition. Scalable hodling of bitcoin, 1- 1million BTC no problem.
Scarce Scarcity is defined by his limited amount (21million BTC).
Score: 17/11 = 1,54
Bad fiat Money (eg. Venezuelan bolivar)
1. Medium of exchangeBad. Money is about trust and when you not sure that opposite side accept it, you will find some other way, how to exchange goods and services.
2. Store of value Bad. Inflation money can't store any value. It's only priceless paper.
3. Unit of acountBad. OK its countable but with hyperinflation, new emitting banknotes must have higher and higher value. You can't think that you do book-keeping in that conditions.
Potential, trendBad. Having bad money in your country is just painfull experience. You are basically in vicious circle.
AdoptionAverage. People know that currency exist, but don't want to use it, exiting system into other ways of trading is only solution. money.
Power of third sideBad. Money from order of weak authorities creates even more weaker money.
DividableMost money are in computer so it is easy dividable. Coins and banknotes have exact value.
DurableCoins are pretty durable and banknotes have also solid durability.
VerifiableModern banknotes have many security features it is hard almost impossible to fabricate it.
TransferableIt is problem because, in online world, you need trustworthy intermediary in that process and this subjects are under political pressure. Cash is peer-to-peer, but it disappears with time.
Scarce Amount money in economy depends only on decision central bank and authorities.
Score: 25/11 =2,72
SCORE future and history
I feel obligated to say that this web determine opinion of only one person inspired by Bitcoin community and was created for fun and do not serve as investment advice. Do not take this site too seriously, every human with access on internet can contribute to evaluate "value of money". Money are used by literally everybody, 1000 people have 1000 opinions. The question is whether the market mechanisms of supply and demand for money do not replace the whole evaluation of the "value of money" and the whole site is useless.
Update when I feels it is necessary.
"In a situation where peoples has income in fiat money (whose purchasing power decreases in the long run) and the possibility of saving in bitcoin (whose purchasing power increases in the long run), it is rational to withdraw bitcoin from circulation as part of long-term savings and use fiat for normal consumption." - Josef Tětek
"Today, most billionaires do not understand bitcoin. Bitcoin is an equal opportunity mind-bender. But even those who do not understand bitcoin will come to rely upon it." - Parker Lewis
"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop." - F.A. Hayek.
"History clearly shows that it is impossible to escape the consequences of other people owning harder money than yours." - Bitcoin Standard, Saifedean Ammous
"Money is memory of good deeds" - Juraj Karpiš
Usefull links:
- Mempool
- Blockchain visualization
- Overall Market value
- Top exchanges
- Hodlline
- Fiat market cap
- Mining BTC Pool shares
Sources:
https://saifedean.com/thebitcoinstandard/https://www.alza.cz/bitcoin-odluka-penez-a-statu
https://en.wikipedia.org/wiki/Gresham%27s_law
https://unchained-capital.com/blog/bitcoin-obsoletes-all-other-money/
https://en.wikipedia.org/wiki/Money
https://en.wikipedia.org/wiki/Gold
https://en.wikipedia.org/wiki/Bitcoin
https://positivemoney.org/2011/05/what-is-money/
https://www.investopedia.com/terms/m/money.asp
https://mises.org/library/denationalisation-money-argument-refined
https://mises.org/library/what-has-government-done-our-money
https://web.archive.org/web/20050404081557
https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/
Author: Jan Hložanka
2026