This was an unusually popular thread, thank you all for your comments.
In this thread, we examined how people think about the word, "fiat", and I figured out that in many cases people regard "governments" and "nation-states" to be the same thing. This is an interesting linguistic phenomenon - perhaps because of this, people generally have had trouble grasping the concept of governance where it does not apply to nation-states, which is where the sub-industry of corporate governance consulting finds its mettle.
Historically, the nature of the word, "govern", has nothing to do with nation-states per se, but with control systems in general. So with regards to understanding why crytocurrencies are controversial, my conclusion at this time is : people acknowledge that cryptocurrencies have governance, but they take issue with the absence of governance-by-nation-state.
Further discussion :
Two common themes from objectors to the notion that cryptocurrencies are fiat : "authority", "guns"
On to the definition of "authority", wherein, does the word imply a natural person who exerts dominance by force? Can it instead be an abstract protocol? What if it is a body of natural persons, who choose subjectivity to an abstract protocol? If the last one is accepted : it's just a self-governing decentralised organisation, subject to a credo, like any so-called religion. Even inter-national religious bodies are deemed to be authorities, one might note that some of them even happen to have guns.
I tend to say : any governance system issuing tokens, is issuing fiat; regardless of whether the governance system is manned, unmanned, centralised, decentralised, nationalised, or non-nationalised. The big linguistic hurdle in English is, "government" is customarily used to refer to "national government", whereas in general the implication is not necessary - hence by custom we refer to "non-government organisations" which are actually, "internally governed, but non-nationalised, organisations". Likewise if the global association of honest luddites issued, physical tokens bearing the mark of their god, for trade among their own kind, I would call that fiat also.
The really interesting development in the history of ideas then seems to be : it's not simply the contemporary nation-state-denominated monetary system which is being challenged, but the overarching concept of the nation-state as today's predominant "unit of governance".
