Fiat in Italian means decree or directive. This is what the payment means of states are called. They are also called fiduciary, or secured only by the trust of market participants in the issuing state.

What is fiat in everyday understanding

Fiat consists of:

• paper banknotes;
• metal coins;
• non-cash funds in bank accounts (plastic cards linked to accounts).

Fiat in cryptocurrency trading

Cryptocurrency is just beginning to take steps toward erasing fiat currencies. If you are not a miner, if you are not gifted cryptocurrency - it means you purchased it with fiat money. This is considered the most popular way to acquire crypto assets.

There is an opinion that cryptocurrency will displace fiat, which is increasingly depreciating. Even now, people receive high income by keeping their savings in tokens. Cryptocurrencies are not tied to a specific economy, have limited emission, therefore their value moves in a positive direction.

Disadvantages of fiat money

Conventional money has a number of significant disadvantages:

• inflation, all currencies are subject to depreciation annually;
• currently, fiat money is not backed by anything;
• the population does not trust money and deposits, the profitability of which is several percent;
• the main economies of the world live "in debt" and have the character of a long-term bubble.

Thus, cryptocurrencies have very serious prospects in the near future.