💰 What Is Fiat Currency?



Fiat currency is the traditional money issued by governments—think the US dollar ($USD), euro (€), or yen (¥). Unlike cryptocurrencies like $BTC or $ETH , fiat isn’t backed by a physical asset; its value comes from trust in the government that issues it.

✨ Why It Matters

• Bridge to Crypto: You usually need fiat to buy your first crypto on exchanges.

• Everyday Use: From your coffee to rent, fiat is still the main player in daily transactions.

• Inflation Watch: Governments can print more fiat, which sometimes leads to inflation and currency devaluation.

💡 Real-World Analogy

Imagine monopoly money that everyone agrees has value—but only because the game master (the government) says so. The trust behind the system keeps it running.


🚀 Pro Tip

Understanding how fiat works helps you see why crypto was created. Bitcoin, for example, was designed to be independent from government control and inflation-prone fiat systems.

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