Bitcoin is different, but by no means is it or will it in any way obsolete government issued currency (it's wrong to call it fiat as if bitcoin isn't also fiat, which it is). It is however the only crypto currency that matters and will remain so.
Or it will just die once users have to pay the real transaction costs and it becomes really obvious how expensive that system is.
Bitcoin by contrast is "inconvertible digital money made legal tender by no-one because it's not legal tender".
So.. it's fiat in the sense that "by fiat" sense - which is where fiat money as a term comes from, but not in the strict "fiat money" sense of the phrase.