That's right. I am also aware that the word is used nowadays to describe paper money.
Fiat paper money and bitcoin both have no value for direct use, that is probably the connection, but bitcoin is not fiat.
Then you do realize that this is an informal and highly inaccurate use of the term, and not the technical definition used by economists.
War is peace, my friend.
No, the technical definition is what I wrote above. And war is certainly not peace, why would you say that?
The technical definition of a fiat currency is a currency with no intrinsic value, is it simply declared to be money (like US Dollars after Nixon's 1971 executive order, like bitcoin) The use of fiat to mean "evil gubmit money" is a colloquialism used by some libertarians with roots in the US Dollar transition from a commodity-backed currency to a fiat currency.
"War is Peace" is a snarky example from the novel "1984" of what happens when words are redefined to further political rhetoric.