What is a fiat currency?

A currency issued and declared as legal tender by a central bank or public authority is considered fiat currency, such as British Pounds and Euros. Fiat money allows a central bank or public authority to employ virtually any material, such as paper (which is lightweight and convenient for carrying), as a medium of exchange.

Cryptocurrency is not tied to any fiat currency. It is not issued or backed by any government and is not associated with any underlying value.