Fiat money or fiat currencies are those currencies that are circulated with the backing of governments. Issuance and control are carried out here by central and\/or national banks. Examples include the US dollar and the common currency Euro. Fiat money generally refers to currencies that are not linked to commodities such as the precious metal gold. It can be increased as often as desired by the centrally responsible body. <\/p>\n
The cryptocurrency<\/a> Bitcoin<\/a> was invented as a response to this very fiat currency model. Therefore, the supply<\/a>, i.e. the amount of Bitcoin in circulation, has been limited in the Bitcoin protocol. The halving<\/a>, which significantly influences the creation of new Bitcoins, is responsible for the limitation. <\/p>\n By definition, fiat money is something that initially has no intrinsic value. Despite the lack of intrinsic value, fiat money serves as a medium of exchange and you can buy goods in return. The classic counterpart to fiat money is so-called commodity money, which has existed for centuries and has a long tradition. Commodity money has an intrinsic value. Especially in the past, but sometimes still today, the following tangible assets are used as classic commodity money, for example: <\/p>\nFiat Money Definition & Explanation<\/span><\/h2>\n
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