Fiat evolved from gold coinage. Fiat had value because the gold notes had value, because gold had value. The evolution of money was not driven by value but by logistics. Each step was enforced by the government's mandate. People were promised the fundamental qualities of money would not be changed.

Executive Order 6102 required all persons to surrender gold coins, bullion, and certificates to the Federal Reserve.

Nixon removed US from a gold standard and immediately enacted price controls. Economic Stabilization Act of 1971.

These were not the actions of the free market.

In any case, markets clearly find value in fiat. A lot of money is locked up in savings, money markets, bonds, etc. In countries with bad money, people still trust it to hold value until they are done with their shopping or can exchange it for a better currency. They would not accept it otherwise. They would replace it for something better in a heartbeat if given the chance.