# FIAT money Fiat means determined by an authority. When a currency is called “fiat money”, this indicates there is a central authority that controls the money supply and that supply has no underlying value; it is not redeemable. It is only valuable because the government says so and people decide to agree. A nuance here, one can argue that fiat does have one fundamental value; the government agrees to permanently accept taxes in the form of fiat, and that can keep the government from seizing your assets and jailing you. But otherwise, fiat money is just paper with no fundamental value or backing. Prior to the 1970s, many countries had currencies that were backed by gold. These currencies were not fiat currencies because they were not subject to arbitrary control. A government’s ability to print money was limited by the quantity of gold reserves they had to secure it. #### How is fiat money relevant to the Network State? People are suspicious of the crypto movement and complain that Bitcoin is unbacked, worthless, a Ponzi scheme. But apart from the fact that you can’t pay taxes in BTC (unless you live in El Salvador) it's not really different from fiat money, which is always unbacked. It has value because it is scarce and can be, by social agreement, used to represent economic value, just like a dollar. Meanwhile, USDT claims to back all the crypto tokens they issue with actual USD reserves. The USD itself is backed by nothing, but Tether can claim they are backed by USD, which people trust. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://gitbook.jur.io/wiki-network-state/dictionary/fiat-money.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.