[jMyles]

> can be inflated by a command or act of will

> not backed by a physical commodity

Aren't these two ways of stating the same monetary property? The reason that fiat currencies can be created by fiat is they aren't backed by anything.

> Commodity-representative/redeemable currencies cam be created at will

No they certainly can not. Not without an actual supply of the commodity. At least not in the case of redeemables. Obviously some 'representative' currencies, like those that Zimbabwe has tried, have ended up turning into fiat.

[dragonwriter]

> > Commodity-representative/redeemable currencies cam be created at will

> No they certainly can not. Not without an actual supply of the commodity.

Yes they can. (And there is plenty of historical example of that happening.) Heck, pre-state-monopoly banknotes were essentially a redeemable virtual currency over the currency in which they were denominated which often relied very heavily on this trait.

There is a risk associated with doing so, but that's also true of fiat currency, though the exact failure mode is different.