Fiat money refers to the money that is issued and regulated by the state. An example of fiat money is the USD. So how is fiat money different from Bitcoin? First and foremost, fiat money comes from the state and is regulated by a central government. Fiat money also has a physical existence such as a paper bill or a coin. Fiat money is considered to be legal tender.
As defined by law, legal tender refers to that which a debtor can compel a creditor to accept as payment. No state, government, or central bank has nay known control over Bitcoin. Bitcoin is not considered to be legal tender as defined by any law, unless if a contract admits the payment to be in bitcoins. While bitcoins are not technically considered to be fiat money, the good news is that more and more people and businesses do accept bitcoins as a medium of payment.
In fact, due to the ever increasing value of Bitcoin, many merchants are happier to receive bitcoins than a fiat currency. To date, more and more businesses are welcoming Bitcoin payments. Many people wonder if Bitcoin will ever replace fiat money. This is a subject that is still unknown to date.
Opinions on this issue are very divided. There are those who claim that governments and central banks will never allow Bitcoin to replace any fiat currency. If such were to occur, fiat money will lose any public value they ever had. However, there are others who believe that bitcoin will not just replace fiat money, but will become the new currency that will be widely used on an international or world-wide scope.
It would be like having one currency for all. If you look at the current trend, there is so much news about Bitcoin and other Altcoins and how various governments are reacting to it. Many governments are trying to outlaw Bitcoin, while a few are trying to figure out how to accept Bitcoin. The good news is that no government or central bank has any known control over Bitcoin. Whether or not Bitcoin will entirely replace fiat money remains unknown. What is certain is that Bitcoin is currently being used by more and more people world-wide.
