Fiat Money [Token Money] is currency that is not based on actual value like silver or gold, rather, it relies on decree or law to impart Value, redemption is not guaranteed.

Exampling the American situation...From 1878 until 1938, U.S. currency was backed by gold. Before that, dating back to 1792, Congress followed a bi-metallic standard under which gold and silver served as dollars.

When Federal Reserve Notes were originally issued in 1914, the gold standard was in practice.
The bills were engraved on the reverse with:

• THIS NOTE IS RECEIVABLE BY ALL NATIONAL AND MEMBER BANKS AND FEDERAL RESERVE BANKS AND FOR ALL TAXES, CUSTOMS AND OTHER PUBLIC DUES.
  IT IS REDEEMABLE IN GOLD ON DEMAND AT THE TREASURY DEPARTMENT OF THE UNITED STATES IN THE CITY OF WASHINGTON, DISTRICT OF COLUMBIA OR IN GOLD OR LAWFUL MONEY AT ANY FEDERAL RESERVE BANK.

While many debate the legality of the Federal Reserve, and consequently the lawfulness of these notes, there is no doubt that in 1914 through 1938 the notes were backed by "... gold or lawful money... " .

In 1938, President Franklin Delano Roosevelt issued an executive order to recall all gold and gold certificates.

A year later, Congress passed the Gold Reserve Act which modified the gold standard with a devalued dollar. FDR then issued a proclamation reducing the gold content of the dollar to 59 percent of what was established by the Gold Standard Act of 1900.

A statement on the front of 1950 series Federal Reserve Notes says:

• THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE, AND IS REDEEMABLE IN LAWFUL MONEY AT THE UNITED STATES TREASURY, OR AT ANY FEDERAL RESERVE BANK

A statement at the bottom of the note says: WILL PAY TO THE BEARER ON DEMAND(followed by the denomination).

These notes were known as credit money - paper money backed by promises by the issuer to pay an equivalent value in the standard monetary metal.

Soon thereafter, the Federal Reserve stopped any pretense of backing the notes with lawful money.
By 1963, the U.S. Treasury and Federal Reserve quit promising to pay anything. The 1963 series Federal Reserve Note declares:

• THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.

This is what is known as Fiat Money...paper money that is not redeemable in any other type of money.

If you own a promissory note to pay nothing, what will you do when the plutocratic powers that create and control our money supply decree that nothing is exactly what you will get?

Over time, fiat money becomes worth less because of the ever increasing money supply that is pumped into the economy. A major missing element in modern money is scarcity.
The Fed can print as much as they want, whenever they want.

The result is that our modern fiat money is without a store of value.

Fiat money is a credit issued by the banking system, it is created out of thin air whenever assets are purchased by the Fed or when depository institutions make loans.
Conversely it vanishes whenever the Fed sells assets or bank loans are repaid.

The creation of Fiat Money allows the benefits of Seigniorage to accrue to the issuer.

Seigniorage