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What does Fiat mean?

What does Fiat mean?

Where did the term "fiat" come from, and just what does it actually mean? Is there non-fiat money? And why are we now talking about the distinction?

Transcription

What's up party people? Chris DeRose here, Community Director of the Counterparty Foundation. Today I'm in Vizcaya in downtown Miami. Yes, what you see is, in fact, downtown Miami. This is a little bit off the mainstream path. All the big buildings are over there, but this is a historic area. It's an old Florida house.

Beautiful place, highly recommend it but enough about that. Let's talk fiat. More specifically, what is fiat? What does fiat mean? This is a question that was posed to me the other day. I think a lot of people have been seeing this on the news and maybe you came here because you did a search yourself like, what is fiat? I think it needs to be explained. This whole thing with fiat started in the Bitcoin movement when we had an alternative to fiat that became a currency maybe, or money maybe, whatever it is that you feel. With traditional forms of money in today's day and age, we think of them as having value because the government tells us they have value.

So you look at dollars, and euros, and these types of things, they're not backed by anything. But they have value because we're told so. Now, that contrasts with a lot of historical notions of money, most specifically gold. Gold has value because it has value. Nobody says gold has value. It has value maybe because it's historic and it's got a precedent for having value.

Maybe it has value because there's intrinsic value. You can use it to make jewelry. Maybe there's other reasons it has value, but the point is that it's not valued because there is no intrinsic value other than what is being told by the government. That's the gist in a nutshell. Fiat things have value because the government tells us they have value and because people have faith in the government and it extrudes from there. In the Bitcoin movement, we like to say that Bitcoin has value because it has intrinsic value.

There's all the things that you can do with it. Certainly the Counterparty Project is the foundation that I believe the most in the intrinsic value of. But there's all kinds of things from proof of existence, to various forms of a master coin, and color coins, and these types of things. Bitcoin has value not because the government says so, but because we can use it for things and because it's a good medium of exchange and all of that. But that's what Fiat means quite succinctly. Fiat means that something has value because the government says so.

There's a couple of other terms for fiat. I think Fiat most literally means the government or something like that. More specifically, it's fiat money that we'd be talking about here. That's the gist. Do you have more questions about Bitcoin? Is this your first video that you've seen of mine? Check some of my other stuff out. If you found this question interesting, you'd probably find some value elsewhere.

And if no one is answering your Bitcoin questions, ask me. I'd love to answer them. You can email me. My email address is chris@chrisderose.com. And on Twitter, my handle is derosetech.

No question is too small or too complicated. I've got a pretty good track record for breaking things down. And if you like this video, subscribe to the channel. Thanks for coming and party people. I'm out.