2021 - 2024
Useful fiat money (eg. Dollar)
1. Medium of exchange
Average. 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%. Currently year-over-year dollar
inflation rate (2021 to 2022) is 7.48%. In Euro area is average inflation 5,1%.
3. Unit of account
Good. 93% of all money all non-psychical. Rest 7% is also easy because we have banknotes of exact value and in addition everybody have accounting in dollars (or others currencies, eg. Euro).
Potential, trend
Average. In world are used government printed money, but since 1971 we are slowly coming to the end of that era.
Power of third side
Bad. 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.
Dividable
Most money are in computer so it is easy dividable. Coins and banknotes have exact value.
Durable
Coins are pretty durable and banknotes have also solid durability.
Verifiable
Modern banknotes have many security features, it is hard, almost impossible, to fabricate it. In digital form it is even harder.
Transferable
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.
Rare
Amount of money in economy depends only on decision of central banks and authorities.
Score: 19/11 = 1,72
Precious metals (eg. Gold)
1. Medium of exchange
Bad. You may want a buy car today. So try it with gold! Not a chance.
2. Store of value
Good. Gold tradition as a valuable material is 2500 years old.
3. Unit of account
Average. Today we do not have gold coins and your bookkeeping is not adapted to use gold as account records.
Potential, Trend
Average. Holding gold is known as a safe harbor for most people in the world. Gold slightly gain value in long term.
Adoption
Good. Everybody on planet knows gold.
Power of third side
Average. If you have larger amount of physical gold you must trust somebody else to protect it. Small amount is storable.
Dividable
You can melt gold to a limited amount and create coins.
Durable
Gold and silver are pretty durable.
Verifiable
On first look it's easy to recognize gold, but u need special tools how to check exact purity of gold.
Transferable
If you transfer bigger amount of gold it is always dangerous and expensive.
Rare
Gold inside of earth is limited amount.
Score: 20/11 = 1,81
Bitcoin
1. Medium of exchange
Average. 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
Average 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 15 years of history and high volatility in short term.
3. Unit of account
Bad. It is easy to count, but cause of volatility it's not reliable. You probably do not your bookkeeping in bitcoin yet.
Potential,Trend
Good. 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).
Adoption
Bad. Adoption of bitcoin is still in their beginning. We are probably on edge between "early adopter" and "early majority" phase.
Power of third side
Average. 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.
Dividable
1 BTC you can divide to 100 000 000
Satoshi. With Lighting network you can divide even more.
Durable
Fully digital money, what you can't touch that you can't destroy.
Verifiable
You can verify with full node on your computer.
Transferable
Peer to peer from definition. Scalable hodling of bitcoin, 1- 1million BTC no problem.
Rare
Rarity is defined by his limited amount (21million BTC).
Score: 18/11 = 1,63
Bad FIAT Money (eg. Venezuelan bolivar)
1. Medium of exchange
Bad. 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 account
Bad. 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,Trend
Bad. Having bad money in your country is just painfull experience. You are basically in vicious circle.Adoption
Average. People know that currency exist, but don't want to use it, exiting system into other ways of trading is only solution.
Power of third side
Bad. Money from order of weak authorities creates even more weaker money.
Dividable
Most money are in computer so it is easy dividable. Coins and banknotes have exact value.
Durable
Coins are pretty durable and banknotes have also solid durability.
Verifiable
Modern banknotes have many security features it is hard almost impossible to fabricate it.
Transferable
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.
Rare
Amount money in economy depends only on decision central bank and authorities.