He doesn't actually say the currency is a fiat currency he just gives his opinion . "I would argue, Bitcoin is a fiat currency."
Also there are three definitions on that page.
> The term fiat money has been defined variously as:
> - any money declared by a government to be legal tender.
> - state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
> - money without intrinsic value.
Under the last definition bitcoin would be easily considered fiat.
Also he could and does debate whether you could consider the system that regulates the bitcoin currency a government which would qualify it under the other definitions.
> Bitcoin is simply not a fiat money: it isn't mandated by law that bitcoins have value, instead it is people (markets) who decide that. It's the exact opposite of fiat money.
It isn't mandated by law the value of any other law what the value of any fiat currency is. The initial value is as you said in your definition but the initial value of bitcoin is defined (the cost to produce a valid block).
Due to its nature Bitcoin is really a special case when trying to categorize it anywhere. I also think the author uses a good definition to draw out the differences.
"Also there are three definitions on that page... Under the last definition bitcoin would be easily considered fiat."
Then I regret citing it, it is wrong. That third definition actually misrepresents its source (Mankiw's Principles of Economics) -- what Mankiw actually says is:
"fiat money: money without intrinsic value that is used as money because of government decree" (emphasis mine)
"Money without intrinsic value is called fiat money. A fiat is simply an order or decree, and fiat money is established as money by government degree..."
"It isn't mandated by law the value of any other law what the value of any fiat currency is."
I meant that fiat money only has value (as opposed to... no value) because it is mandated by law -- you are required to accept it as payment of debt, to pay taxes using it, etc. Sure, what the value is in real terms is a market decision.
Also there are three definitions on that page.
> The term fiat money has been defined variously as:
> - any money declared by a government to be legal tender.
> - state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
> - money without intrinsic value.
Under the last definition bitcoin would be easily considered fiat.
Also he could and does debate whether you could consider the system that regulates the bitcoin currency a government which would qualify it under the other definitions.
> Bitcoin is simply not a fiat money: it isn't mandated by law that bitcoins have value, instead it is people (markets) who decide that. It's the exact opposite of fiat money.
It isn't mandated by law the value of any other law what the value of any fiat currency is. The initial value is as you said in your definition but the initial value of bitcoin is defined (the cost to produce a valid block).
Due to its nature Bitcoin is really a special case when trying to categorize it anywhere. I also think the author uses a good definition to draw out the differences.