Although most people use the term fiat currency to mean state currencies, I think fiat is the right word to define a non backed currency like bitcoin.
What he means is that it was "created out of nothing". But then he claims "the value of a bitcoin should be its cost of production" which is in contradiction with the first statement.
Although bitcoins are not made out of thin air, neither are paper bills, but the monetary value is never backed. Its users give them value by fiat, by the common agreement that it is a medium of exchange.
This agreement is often forced by one or several states. In the case of bitcoin, some people trust the cryptography behind it and agree to use it as currency. As more people join the agreement, the monetary value increases.
I'm happy to say that unlike gold, bitcoin is fiat.
But it shares most of the properties that make gold a good storage of value.
I just prefer the term "fiat" over "non-backed" money.
I understand that many people want to use the term "fiat" over "national" or "state" currencies.
It's the same with "money" and "currency". You can find very different definitions.