A St. Louis Fed Official Made A Presentation About Bitcoin That Bitcoin Fans Are Going To Love

St. Louis Fed Vice President David Andolfatto has outed himself as the central bank official most bullish on Bitcoin.

In a new presentation, Andolfatto calls Bitcoin “a stroke of genius” and says the digital currency’s technology is causing existing financial institutions will have to “adapt or die.”

And he says central banks — including the Fed itself — should welcome the challenge Bitcoin has posed. Hence the image above.

Besides his enthusiasm, his presentation provides a really clean, simple snapshot of what Bitcoin is for anyone who may still be fuzzy on what it is.

Check it out.

This is the most up-to-date quasi-official presentation out there.

Some quotes showing the mindset of Bitcoin boosters

Bitcoin is a set of rules, Andolfatto explains.

No one knows who invented it.

But the main programming has been taken over by others.

In the real world the Fed manages the money supply. In Bitcoin, there is no Fed equivalent -- it's managed by the Bitcoin network.

Some people are into Bitcoin because they hate financial institutions.

Here are the goals of Bitcoin.

So how do exchanges work? You need to set up a wallet.

But you have to be careful -- there've been lots of issues with wallet software.

The centrepiece of Bitcoin is its Blockchain, which more explicitly takes the place of the Fed.

Instead of central bankers, there are 'miners.'

In exchange for creating more Bitcoin, they work to approve transactions. Their work must be confirmed by other miners.

They're not actually mining anything.

Andolfatto calls Bitcoin 'a stroke of genius.'

And it's getting bigger.

The price has gone as high as $US1,200 but remains volatile.

By some definitions, Bitcoin is a bubble.

It's probably too soon to say whether it's a good investment.

You may have heard about problems at the MtGox exchange. These were not the result of Bitcoin itself.

Bitcoin is probably too unstable to replace U.S. dollars for now.

The purchasing power of Bitcoin is substantial, for now.

Gold still boasts more purchasing power.

Bitcoin is no more inherently prone to facilitating crime than any other currency, Andolfatto argues.

He says Bitcoin regulation is like taming a mythical beast.

More regualtion has made Bitcoin less attractive.

Bitcoin technology 'will force traditional institutions to adapt or die.'

And central should welcome the challenge.

Paging Chair Yellen...

For another view of Bitcoin, check out what UBS' analysts have to say...

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