So, are you disregarding the definition altogether?
No, I am saying there is a problem with the definition. [...]
Yes, but you can't arbitrarily redefine words. People need to understand each other, and that's why there are words with agreed meaning.
And the agreed meaning of fiat currency is a currency which value is regulated by a government.
That's not the definition of fiat. The only "value" that the US government can control on your US dollars is the amount of US Dollars needed to pay your taxes and keep you out of jail for tax evasion. Everything else is determined by how many US dollars a seller will take from a buyer for something else of value.
If you meant to say the meaning of fiat is "currency issued by a government not backed by a commodity" --
then replace "government" with a "a consensus of bitcoin miners" and you have Bitcoin.