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As we know, most fiscal history has been dominated by a web of central banks.
The central banks are in a race to debase, a trend that's rapidly accelerated over the past decade.
There's a lot of money to be made by issuing money.
After a century of massively inflated fiat currencies worldwide, it's little wonder people have flocked to a totally independent form of new money.
Bitcoin's appearance and meteoric rise have galvanized the market for truly free money.
To quote Sir Richard Branson on CNBC last week, "Whoever was behind Bitcoin was brilliant…"
But the race for control of virtual currencies is heating up…
Understanding the Road to Virtual Currency
The precursor to virtual currencies is PayPal, established already 15 years ago.
It has come to dominate the electronic payments space, particularly after it was acquired by eBay in 2002.
The company essentially allows payments and money transfers through the Internet. Consumers and vendors link their bank accounts and/or credit cards to their PayPal accounts in order to send or receive payments.
Fees are charged for processing payments and receiving money, depending on the currency, payment option, countries involved, amounts, and account types.
But PayPal is a payment facilitator rather than a currency, as it uses the Internet to accomplish what's otherwise done through checks, money orders, and wire transfers.
Widespread acceptance of PayPal has moved the service from the edge of the "payment frontier" to the "go-to" source for web-based financial transactions.
The appearance of Bitcoin, however, has meant a quantum leap forward, from facilitator to currency.
Bitcoin Arrives
Bitcoin is not issued by any government. It's a peer-to-peer payment system and digital currency that was introduced in 2009 as open source software.
Bitcoin is virtual money, as no actual physical "coins" exist.
They can be purchased using money, but they can also be produced. Users can mine them by employing their own computers to solve complex mathematical algorithms.
When a user pays with Bitcoin, a public transaction log called a blockchain is updated. It's a master list of all transactions worldwide that's chronologically ordered, and its validity is verified through a decentralized system using the Bitcoin protocol.
The beauty of this currency system is that a maximum of just 21 million Bitcoins will ever be produced, and it dramatically reduces the costs of financial transactions.
Without the need for banks, financial services companies or wire agencies, transaction costs can be substantially reduced, freeing up tremendous amounts of capital for far more productive purposes.
Historically Bitcoin has swung widely in value but has settled into something of a trading range recently. At the beginning of 2013, it traded around $15. By late November, it was at about $1,200. Most recently it's traded in the $900's.
As Bitcoin matures and its acceptance grows, it's likely to become a valid form of money.
And that's certainly helped to draw a lot of attention.
On Nov. 18, 2013, the Department of Justice (DOJ) said Bitcoin can be a "legal means of exchange." Bernanke himself even stated in a letter to the Senate panel that Bitcoin "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system."
François R. Velde, senior economist of the Federal Reserve in Chicago, labeled it as "an elegant solution to the problem of creating a digital currency."
Acceptance of the virtual currency for payments is still in its infancy, but it is growing.
Businesses such as Reddit, Virgin Galactic, and Overstock.com now accept Bitcoin, with Zynga now in the testing phase. Even Congressman Steve Stockman, R-Texas, is glad to take Bitcoins as 2014 campaign contributions.
On the other hand, Bitcoin still faces some challenges to its wider acceptance.
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.
The move on Bitcoin as I see it is that of investors and the exchanges: Hungry dogs finding some fresh meat. There are many dangers to this; and to invest in it really means one has to hop on one of the exchanges. Bitcoin is backed by nothing that is spendable. If Bitcoin crashes, and it will because it is based upon greed and revoluition, all one will have left is a record of what one purchased, and that means zilch at the market when you try and buy food. But Bitcon is a reflection of our times, the corruption and greed of the bankers making money from every single financial transaction. A friend of mine who was the head of a shain of credit unions, told me if he had a good location for an ATM he could make 140k per month off that single location. But what he then revealed, is that cash is the bank's product that it sells over and over again – that's why its numbered. What the bank really wants is to own debt, because debt produces pay-backs each and every day. Really, they are just renting dollars to people, and re-renting them time and again. On the one hand, its business at a profit; and on the other its very corrupt when joined with control of the value of the money banks rent in the Federal Reserve Central banking system Thomas Jefferson warned of. That is what needs to be changed. What's worse, however, is the credit card system given to government, enabling government to borrow ob the backs of its citizens. What we are realizing now is that the original banking system, parlayed by government for its joy and power, competes directly with the fee market system by driving up the cost of everything and bringing everyone down in the process of imperial providence and tyranny. So Bitcoin is the temporary system in mankind's attempt to break away from what has brought them so low. The banks are not at fault here, it is a complex issue based upon corruption between all concerned. Bitcoin is nothing more than a digital barter system where the digital money is traded for products and debt within the system. This who deal in Bitcoin – what they call mining – and those who are members of an exchenge are the one's who, just like the banks, make money from the system. So Bitcoin, if it does take over, it is most likely to evolve into just another banking system. It may be a good investment now, although its flash seems to have settled into a down slide. On the long term, however, since it is the nature of governments to control their economical structure, I don't see it as a god investment; as the coins are costly now, they will be devalued by lack of use and abundance of supply. SO the price, as I see it, has not leveled off yet. When it does, there may be some big losers. And if it doesn't, most buyers of products will not grow to understand their ability to purchase products with Bitcoin. Besides, nations are not simply going to sit buy and allows what they have established as their banking system to just vanish and take with it everything that has already been created. What we really need to bring this to a stable end is a gold backed system where the price of gold is fixed and firm internationally. In this way, all nations will have financial equality and this will go a long way to end many of the social and governmental problems we globally face today. We need to ask ourselves, what has God intended for the human race.
This explanation (basically a prognostication) is not without merit, but it's an opinion, a good one, mind you, but still an opinion. What I have issues with is all your 'typos' and 'misspells' as maybe your typing speed needs to slow down to the 'local speed limit' allowed for your typing abilities. What that is, is anybody's guess. Proofreading is not only a lost art, but probably an unwanted concern. Nevertheless, the lack of it before posting copy shows many posters as lacking credibility, IMO. Of course, that's just 'my opinion'. I make typos, as does everyone, but try to limit the practice, or should I say the 'non-practice'. If you actually read what you just typed, you will find most errors. But that's up to you and how credible you intend on sounding or being.
Just trying to help. But I do share some of your logic about bitcoin, just not all of it. No one knows what will transpire.
Bitcoin's greatest benefit, for all of mankind, is that it puts to an end the insane rip-off by the banking industry, of 1% – 3% of every gross dollar that goes through the credit card payment system. 1% to 3% ?!?! How did we ever come to accept this as reasonable and normal? Next time you hand over your plastic to a merchant for a payment, ask him how he or she feels about the fees they have to pay. It is now incumbent upon all of us who are aware of Bitcoin, to be part of it, both by owning some, and by telling all our friends and family of it and of it's benefits.
Title reads America's Biggest Bank Wants Truly Free Currency…. that was the article I wanted to read, but no where in this one does it mention who the largest is and who/where they said that they wanted in.
From a Google search, the largest is JPM and they've said negative things from what I can tell.