Understanding Fiat: The Money We Know
Before we dive headfirst into the digital frontier, let’s get a solid grip on what we all use pretty much every single day: traditional, or fiat, currency. At its heart, fiat money is basically currency issued by a government that isn’t backed by something tangible like gold or silver. Its value doesn’t come from any inherent worth; instead, it gets its power from government decree and the shared trust and confidence of everyone who uses it. Fiat currencies are, by their very nature, centralized. Their supply, how much they’re worth, and how they’re handed out are all managed and kept in check by central banks and government bigwigs.