Hear me out on this one. Bitcoin is fiat. Yeah I know, controversial take. But stick with me here because this actually makes sense once you think about it.

First, what even is fiat? It's basically an arbitrary order or decree. Fiat currency gets its value because governments say it has value and will accept it for taxes. Pretty straightforward. But here's the thing—Bitcoin works exactly the same way, just without a government. There's no King of Bitcoin making a decree. Instead, it's us. We collectively decided Bitcoin has value by choosing to use it. We literally brought it into existence through that collective decision.

People love to call Bitcoin digital gold, but that's actually misleading. Gold is a commodity with distinct use-value and exchange-value. You can mine it, forge it into jewelry, use it industrially. Bitcoin? It's just a database. A database on your computer, my computer, everyone's computer. That's it.

Here's what blows my mind though. Bitcoin only exists as a singular coherent thing because we all agreed to use the same rules to validate changes to that database. Without that agreement, you'd just have millions of conflicting copies everywhere. There would be no Bitcoin, which means it would have zero value. Its entire purpose—its use-value—IS its exchange-value. They're literally the same thing, created purely through our collective fiat decree.

So yes, Bitcoin might be hard money. It might have a finite supply. It might fundamentally change economic incentives globally. All true. But it's still fiat currency. Every single property it has, everything it is, exists because we collectively and arbitrarily decided to make it exist. Bitcoin is probably the world's first stateless fiat currency, and that's actually kind of beautiful when you think about it. It proves that value doesn't need a government to back it—just collective agreement.