The currency in the market today is called fiat money. It is money issued by a country’s central bank and traded as a legal, officially recognized medium of exchange. The basis for a currency to work at all is the acceptance of it. If the transaction and purchase means function is given, the full acceptance of the corresponding currency is available or guaranteed. In order for money to retain its value, it can only be scarcely available and kept scarce. If the acceptance of a currency lapses, so-called dual currencies are introduced to take over the money function in a country.

The task of the central bank is to create acceptance for the currency in the respective countries and to defend it. The money issued by the central bank is called the money medium.
Unlike gold, fiat money is not based on any material value – the value is based solely on trust in the respective government and the respective central bank. Central banks are also responsible for and control how much money is in circulation. A devaluation of a currency can result from problems in a government’s financial budget. A currency can only function smoothly if the citizens of a country have confidence in the government and the currency itself.

This led to the development of Bitcoin and all subsequent crypto currencies. A special form of electronic money with which cashless payments can be made. Actually, it is nothing more than a government-independent electronic means of payment of cryptographic permanence, which is not controlled by corporations or the state and is based on a P2P network.

By the way: the term “fiat” in this case is derived from the Latin passive verb “fieri” (“to arise”) and has nothing to do with the car brand of the same name.