As CNBC reports, Bitcoin, the digital currency, will some day replace the whole global financial system, doing the job of banks, insurance companies, credit card issuers and even trusts, a new book asserts.
This extraordinary scenario is the central theme in "The Bitcoin Big Bang" by Brian Kelly, investor and contributor to CNBC's "Fast Money." Kelly says the transformation is as near as a decade away.
The Bitcoin protocol replaces the banker with the miner and by doing so removes the cost of a middleman. The traditional role of the banker was to be a trusted third party, watching every transaction and verifying validity. Satoshi Nakamoto designed a way for a computer to replace a banker. Bitcoin can accomplish this task securely through the use of cryptography.
Even the Federal Reserve is expendable, as bitcoin doesn't need a large governing body to tell everyone it is sound. The computer code ensures that, notes Kelly.
And because there is a natural process of creating bitcoins through its encrypted mining process as well as an already-determined maximum amount that can be created, it doesn't need the Fed's money supply function either.