And the second and third sentence (emphasis mine):
> Fiat money does not have intrinsic value and does not have use value (inherent utility, such as a cow or beaver pelt might have). It has value only because a government maintains its value, or because parties engaging in exchange agree on its value.
Is there a sentence in this Wikipedia article you can point to that implies that only a government can create a fiat currency?
Then any currency would be fiat making the word meaningless. Bitcoin haves an intrisic value like gold, the energy it takes to create a btc. Fiat money can be made out of thin air as the fed can just print more money
Sounds good. How do I convert my bitcoin back into electricity? Is there a Python function for that or something? Would be very useful to have on hand during blackouts.
I mean, that's the whole point of the article we're commenting under. Bitcoin is not a battery, it is a sink. You can't get the electricity back.
Not to mention that if the value of Bitcoin was actually determined by its electricity cost, then Bitcoin and Etherium wouldn't be making moves right now towards Proof of Stake.
No, fiat in general is when an authoritative process is able to create something of value on its own, purely because it says that it exists and is the sole determiner of whether it exists.[0]
In currency terms[1], fiat money is a currency that does not have an intrinsic value in and of itself -- the money has value because people say it has value, not because it can be one-to-one exchanged for another resource at a constant rate, and not because it's useful on its own. Fiat money is often issued by a government, but doesn't need to be.
Bitcoin fits both of those definitions. The "authority" that creates coins isn't a human being, but it does create coins out of nothing. Bitcoin has a formal process by which new coins are created and added to the market. That's why people mine -- they mine because Bitcoin is fiat and they want the new money that the algorithm is issuing to miners.
Bitcoin also does not have inherent value, nor can it be exchanged at a constant rate for other currencies or intrinsically valuable materials, so it's obviously not a commodity currency or a representative currency. The closest category that Bitcoin fits into is a fiat currency, or if you want to be more specific you could maybe get away with calling it a fiduciary currency. It has some fundamental differences from the US Dollar and traditional government-backed currencies, but that hardly means it's a completely brand new category.
I don't see any definition of fiat currency saying that "going to jail for not using it" is the deciding thing that makes it fiat. I see a lot of people pretending that algorithmic governance models don't count as real governance models when it comes to controlling supply. But I don't see any reason to believe them on that point.
The more compelling arguments against Bitcoin as a fiat currency compare it to gold, but I find those arguments weak as well, because:
A) gold is a physical item with real-world uses,
B) gold lacks Bitcoin's governance model that dictates how new currency is issued (arguably the most important part of a fiat currency), and
C) because even with those differences I don't see universal consensus that the modern way we use gold in society doesn't also fit the definition of a fiat currency, particularly once you take the gold standard into account.
But whatever. However you want to define fiat, mandating usage isn't an essential part of it in any definition I can find online. Bitcoin is governed by an authority structure that issues new currency at regular intervals. That authority being an algorithm doesn't change that, it just means the "government" controlling the currency is more predictable and less flexible.
How is Bitcoin being imposed on you?
On the other hand, if you live in the US and you decide to not use the US Dollar, you'll go to jail.