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...
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 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. The U.S. Treasury's anti-money-laundering unit, the Financial Crimes Enforcement Network (FinCEN), sent "industry outreach" letters to several firms. They outlined the potential compliance measures related to Bitcoin businesses.
China's central bank recently banned financial institutions from dealing in Bitcoin, and even BTCChina, the world's largest Bitcoin exchange, has been blocked from accepting yuan renminbi, China's currency.
China knows a thing or two about manipulating currency, so the simple fact that it's reacted like this to Bitcoin gives the virtual currency further credibility. Perhaps the Bank of China sees it as a competitor?
Yet Bitcoin's biggest challenger could well be a new rival... originating from within the banking system itself.
Last November, JPMorgan submitted a patent for their own form of digital currency called "Web-Cash."
With $2.46 trillion in assets, America's largest bank has decided to compete head-on with Bitcoin.
Based on its description, Web-Cash is similar to Bitcoin. It's a system to process Internet payments and conduct financial transactions over a payment network. Even its proposed directory sounds comparable to Bitcoin's blockchain.
The biggest difference, of course, is who's behind it. As America's largest bank, JPMorgan naturally has a major stake in preserving the current system of the Federal Reserve. After all, how else would it have gotten so big?
Money permeates our lives, and central banks control its issuance.
That's a power too valuable for the banksters to give up without a fight. So understandably, the Bitcoin phenomenon hasn't gone unnoticed.
The way I see it, though Web-Cash will do its best to compete with Bitcoin, it would bring us no closer to free-market money.
Yet that's where I think the world is ultimately headed.
As I mentioned earlier, the past decade has seen a race to debase currencies by the world's central banks.
The U.S. Dollar is the de facto reserve currency, but it's lost over 95% of its purchasing power since the Federal Reserve was established 100 years ago.
Despite the Fed's recent move to "taper," it's still soaking up bonds worth $900 billion annually at its current pace.
Last April, Japan announced a $1.4 trillion quantitative easing program to double the nation's money supply, in a bid to jumpstart its economy and rid itself of deflation.
Central banks across the globe are suppressing interest rates, buying up mammoth quantities of bonds, or both. Meanwhile, their debts are swelling at a dizzying pace.
Increasingly, average citizens are cluing in on these government shenanigans.
They know that massive debt is what led to the 2008 financial crisis and that piling on even more debt will only worsen the problem.
The next crisis promises to be much worse.
That's why they're actively seeking out alternative currencies that simplify transactions, boast a limited supply, and aren't government-issued. Bitcoin wins on all three points.
Not surprisingly, JPMorgan's Jamie Dimon disagrees, while Sir Richard Branson is clearly of another opinion.
Bitcoin may not be perfect, but then no currency is, and my bet, along with many others, is on it.
Editor's Note: The White House has certainly taken notice of the rise of Bitcoin. In October, President Obama summoned Google chief Eric Schmidt to the Oval Office and asked him point-blank if Bitcoin was "something he has to worry about." The answer is yes. And what's coming could have major implications for global economies, the international monetary system, and your wealth. Click here to continue reading this story.