How do you value fiat currency?
You didn't read my post properly. Fiat currency is an abstraction. I receive it for my work, and buy goods and services with it.
The government essentially underwrites these exchange rates, and out laws enforce the conditions under which these exchanges are made.
Fiat currencies do not have value in and of themselves. But neither does BTC. BTC is volatile as it isn't underwritten, so it's "value" is completely arbitrary. In fact, BTC - as well as fiat - is valueless unless you can cash out into something outside the system eg physical goods.
And oh the fun that can be had in actually cashing out of BTC.
In essence I'm not distinguishing them at all, except that one has been around a lot longer than the other. In as much as the details differ, absolutely nothing the crypto-woo offers strikes me as evidence that it offers any particular prospect of longevity though, so I'm going to continue to pretend I believe that 'fiat currency' holds 'value', given that pretending to believe the alternative seems likely to result in me having less of this imaginary stuff at the end of the day. Which matters, since people exchange the imaginary stuff for real things. And the actual economy relies on real things being produced, not just bit-patterns. Things I need. I can't eat bits.
And judging things by their past results is exactly how I anticipate their future ones. Hence my comments about the fashionable foolishnesses of the finance sector.
And we can all see what happens when a fiat currency loses it's perceived value - hyperinflation.
The ecurrency folks always make me giggle. They tend to be extremely libertarian in may ways, wanting to get the government out of everything. Well, fair enough in concept, but any private solution will have to have very similar attributes and you have to rely on an even more arbitrary authority than a government to implement it (and control monetary policy, etc).
Not trying to say that our current system is particularly nice, but the alternative presented is just chaotic. BTC does not scale well AT ALL which really doesn't help.