The real base reason fiat currency has value is because the government requires taxes to be paid in it, and they can use force to imprison you if don't pay your taxes. Everything else is a follow-on effect from that.
I don't really buy that argument. Yes, taxes force some level of demand, but that doesn't ensure any particular value of a dollar. The value of a dollar could shrink to arbitrarily low values, taxes only prop up the value of the entire monetary base. The value of the dollar is a follow on effect of what amounts to basically brand recognition from the days when the dollar actually had a commodity backing.