You should stop saying "with fiat", unless you mean it to include Bitcoin, which is very much a fiat currency. It has value only to the extent that you say it has value.
Fiat currencies are to be contrasted with currencies that have intrinsic commodity value -- like gold, or livestock. Bitcoin has no intrinsic value.
The only difference between a governmental fiat currency and a distributed fiat currency (like gold) is that there is no government backing the latter. This has no bearing on the existence of fees for transfer and storage. If you're willing to carry physical currency around and store it in your mattress, payment via US dollars is fee-free as well.
A 'Fiat' currency is one which the government of a country has declared to be the official currency...by government fiat.
That does not include Bitcoin.
Gold is not a distributed fiat currency. It is just Gold. You can exchange gold for currency, or you can make payments directly with it, if the person is willing to receive them.
"A 'Fiat' currency is one which the government of a country has declared to be the official currency...by government fiat."
No, it is not. You are falling prey to a rather politicized definition of the term. All non-commodity currencies are fiat money, but not all fiat currencies are backed by a government.
The word "fiat" is Latin for "let it be done" or "it shall be". It implies only that something happens by decree. The party making the decree does not have to be a government, or even a person of authority.
Well...actually, a fiat currency is one declared and issued by the state as legal tender. It's typically not redeemable for anything else, as a gold-backed one (USD from 1944 to Nixon) is.
And really, a currency like gold is valuable because it has a fixed supply and is universally accepted. Bitcoin has a fixed supply and is rapidly moving towards universal acceptance. It's totally different when a government chooses to make a dollar worth approximately X much and then prints 85 billion of them per month.
So, yeah, gold isn't a fiat currency. And Bitcoin isn't one either.
> It has value only to the extent that you say it has value.
I think there are a few definition of "fiat"* (one of which, as you mentioned, is lacking "intrinsic value"). I agree though that the word "fiat" adds only ambiguity to this discussion.
In exchange for not having transfer fees, you get no protection against fraud or theft. Not such a great 'advantage' for the average person, is it? Oh, I know, you can use escrow and other services to guard against that. But guess what? They're not free!
Credit card fees eat into many businesses' profit margins, especially the ones with low margins.
And that's not the only Bitcoin's advantage.