3 ms·
A fiat currency is any currency that isn't backed by a commodity, i.e. it's not redeemable for a certain quantity of the commodity by the issuer, and bitcoin fa
by lottin 6y ago
A fiat currency is any currency that isn't backed by a commodity, i.e. it's not redeemable for a certain quantity of the commodity by the issuer, and bitcoin falls squarely into this category.
- lowkey 6y agoThe definition of fiat means by decree. In other words fiat currency has value because a central government authority (formerly king) decrees that the paper has value. Bitcoin has no central authority that decrees it has value - only demand by the people drives the value of Bitcoin. Bitcoin may be a lot of thing, but it isn't a fiat currency.
- lottin 6y agoA currency created "by fiat" means it's created without backing. "A novelty of the 20th century was the issue of fiat currencies by governments. ("Fiat" means not backed by any reserve commodity, as the gold- and silver-based currencies of previous centuries were)." [1] [1] https://nakamotoinstitute.org/shelling-out/ https://nakamotoinstitute.org/shelling-out/