Fiat currency has no intrinsic value itself, but it can be exchanged for things that do. As long as people treat it like it has value, then it does have value.
The same can be sort of be said for crytocurrency. But it's a lot less liquid, mostly the only thing you can do with it is trade it for other cryptocurrencies or sell it. It's on much shakier ground that people will continue to view it as having value.
My advice, for what it's worth, until people find a practical application for it, stay away from it.
Fiat currency emitted by governments has intrinsic value: you can pay taxes to the emitting government with it. That's its ultimate value.
In the same vein, some cryptocurrencies have value: you pay with Ether for distributed computations performed by Ethereum network, you way with Bitcoin for your data being permanently recorded on the Bitcoin chain.
"Intrinsic value" is a phrase that has a specific meaning in economics, and you are not using it according to that definition. The current ability to pay taxes with a currency is not intrinsic value by the standard definition of the term. That currency could drop to worthless tomorrow and would be worth nothing. Go ask holders of Weimar Republic marks how much intrinsic value their currency ended up having. None! The value was hyper-inflated out of existence and the country that accepted it as tax payment no longer even exists! But if that currency had been made out of actual gold, then it would've had intrinsic value, and it would still be valuable today.
Guess what ... your dollars today are not made out of gold. They have no intrinsic value.
Yes, that's one approach. It's a very conservative approach though, to stay far away from new technologies until they're firmly established. There's a lot of money to be made by getting into things when they're still on the bleeding edge though, and the entire startup community exists to take advantage of that fact.
The real question is, is it still early days for Bitcoin, in which case it would make sense to get into it now (albeit still risky)? Or are the early days over and all those gains have already been realized? You'd need a crystal ball to know for sure.
The USD is backed by the US governments ability to pay it's debts, which is a legit financial instrument of value. It's not a 'fiat' currency in the sense being described here.
What? The US dollar absolutely is fiat currency, and anyone saying otherwise is simply using a non-standard alternative definition of "fiat currency" than what everyone else is using. Every economist ever will tell you that of course currency issued by a central bank that isn't backed by precious metals is a fiat currency, and that USD along with all the other major currencies count too.
The USD is a fiat currency that is worth what people (the market) values it at. The ability of the US government to pay it's debts is but one (very important) factor in that distributed calculation. It is not solely determined by that. If it were the value would rise or fall solely on the debt-to-GDP ratio - which is probably only loosely correlated - up to a point where default becomes probable and then it matters an awful lot more, like with Argentina.
Fiat currency has no intrinsic value itself, but it can be exchanged for things that do. As long as people treat it like it has value, then it does have value.
The same can be sort of be said for crytocurrency. But it's a lot less liquid, mostly the only thing you can do with it is trade it for other cryptocurrencies or sell it. It's on much shakier ground that people will continue to view it as having value.
My advice, for what it's worth, until people find a practical application for it, stay away from it.