Definition
A medium of exchange that is not backed by any actual tangible value, such as gold or silver, but maintains its credibility due to the confidence of its users. Mostly established by governments, but in the 21st century fiat crypto currencies have also come into existence. Up until 1971 the US dollar was not fiat but on the gold standard and $35.00 cash could, in theory, be redeemed to the government to, in return, receive an ounce of gold.