Every HN post on Bitcoin has to have a discussion about the definition of fiat money.
Fiat literally means "it shall be"; in terms of fiat money this refers to government's declaration that something is legal tender. The US declares that the dollar is to be used as money - that makes the USD fiat money.
Enough people use the term to refer to money which has no "intrinsic value" that the term now means both things. Personally I think that's nonsensical – if the US declared that gold coins are to replace the USD as legal tender, then those gold coins would be fiat money, regardless of any intrinsic value gold might have. But you can't argue against language evolution; "fiat money" has two different and unrelated definitions now, and we need to repeatedly have arguments ending in both sides being correct and nothing of value being concluded.
This discussion must now, as is tradition, be followed up by a discussion of what intrinsic value means and whether it exists. So go on, discuss.
Fiat literally means "it shall be"; in terms of fiat money this refers to government's declaration that something is legal tender. The US declares that the dollar is to be used as money - that makes the USD fiat money.
Enough people use the term to refer to money which has no "intrinsic value" that the term now means both things. Personally I think that's nonsensical – if the US declared that gold coins are to replace the USD as legal tender, then those gold coins would be fiat money, regardless of any intrinsic value gold might have. But you can't argue against language evolution; "fiat money" has two different and unrelated definitions now, and we need to repeatedly have arguments ending in both sides being correct and nothing of value being concluded.
This discussion must now, as is tradition, be followed up by a discussion of what intrinsic value means and whether it exists. So go on, discuss.