Fiat money is the classic money that we all use everyday. Examples include the US dollar, Euro, Great British Pound, Japanese Yen, and approximately 125 other fiat currencies.

Fiat money is established by a government regulation and has no intrinsic value. It only has value because the government enforces and maintains its value, and because the two parties involved in a transaction agree on it value.

Imagine you're a survivor during a nuclear apocalypse. You have $1,000 USD in cash. You find someone with medical supplies that you need. You offer them some money in exchange. But because society has collapsed and the government is enforcing the value of the money, your USD is only valuable if the person you're trading with also agrees that it's valuable. Instead they'd probably rather food, raw materials, or ammunition.

The term "fiat" comes from Latin and means "let it be done," indicating that fiat money only has value because parties agree it to be valuable.