With the creation of double entry accounting in the late 1400s, we saw ledger based money evolve. This has been done throughout history by private entities. They were the money creators, using credit on ledgers as money. This helped to alleviate issued with coin money.
Fiat currency came into being since gold could not be mined fast enough to keep up with a booming economy. It depends upon people's perception. An economy that is growing shows that it is producing other things of value.
Currency tied to strong economies will be perceived as stronger money. This same concept is likely going to apply to cryptocurrency. Those blockchain systems that have strong economies with heavy commerce and transactions will likely be valued higher than those who do not.
Types of Money
Most currencies operate under a fractional reserve banking system. When this happens, we see two forms of money emerge:
Since loans are what create the money supply, that is in the hands of the banks. The central bank can only affect the monetary base. As such, all actions undertaken to stimulate the economy are indirect by an entity such as the Fed.