Kentucky Sen. Rand Paul on Tuesday became the second officially announced Republican candidate for president in the 2016 race, joining fellow senator Ted Cruz in a field that could grow to nearly a dozen candidates.
Paul faces very long odds of securing the GOP nomination given that his libertarian views on a range of issues from drug laws to a non-interventionist foreign policy are well outside the traditional Republican mainstream.
Paul and his advisors believe that the iconoclastic senator can build a new coalition within the GOP fueled by the libertarian stalwarts who backed Paul's father, former congressman Ron Paul, coupled with younger Republicans eager for a fresh face and skeptical of the business-aligned, hawkish establishment.
There is no question that Paul has a unique ability to charm younger Republican voters with his focus on personal privacy and a tech-friendly approach that has taken him repeatedly to Silicon Valley to build a network of ideological and financial supporters.
But Paul has a long way to go to turn these early efforts into a winning presidential campaign. He trails Jeb Bush, Cruz and Scott Walker in early polling and has a net unfavorable personal rating. He also has a reputation as prickly and defensive with the media, something that could hurt him in the grueling months ahead.
Paul's presidential lane is also perhaps the most complex to navigate among the current and prospective GOP field. It holds great potential but Paul must retain his father's core supporters—who thrill to isolationist and bash-the-Fed rhetoric—while also appealing to an establishment that finds those views highly dangerous.
Paul's libertarian views also do not always sit easily with evangelical conservatives who favor a much stricter approach on gay marriage and other issues. Paul has moved in the direction of evangelicals in recent weeks, possibly looking to blunt Cruz's appeal to this group, telling a conference in D.C. of the need for a new religious "revival" in America.
Paul has also been gently distancing himself from his father's isolationist views in an effort to make himself palatable to far more hawkish Republicans worried that a president Rand Paul would fail to take on rising threats in the Middle East or otherwise project a muscular American presence abroad. In February, Paul told the Heritage Foundation that he was a "realist" and not an "isolationist" and would take on radical Islam without promoting "Western occupation."
Read More Rand Paul announces presidential run
One area where Paul has not yet created much distance from his father in his aggressive approaching to "auditing" the Federal Reserve, which opponents consider code for injecting Congress into monetary policymaking.
On this front, Paul can count on heavy backing from conservative primary voters skeptical of a powerful and still relatively opaque central bank. But he also opens himself up to heavy criticism that all of his predictions about the Fed's easy monetary policies leading to runaway inflation and a weak dollar have all completely failed to materialize.
There is also the fact that the Fed is already exhaustively audited both by the government and outside auditors. But these are largely general election problems. Paul's views on the Fed mean he will get very little support from Wall Street bankers but he was never counting on that support and will in fact run against it in the GOP primary. He is likely to cast Jeb Bush as the perfect example of Wall Street-backed, dynastic political figures who have failed the GOP in recent elections.
The biggest challenge for Paul in the coming weeks and months will be stitching together the strands of a diverse electoral coalition without, in the process, seeming like a panderer with no core political beliefs. This will be both fascinating to watch and incredibly difficult to pull off. Paul is a highly talented and unique politician with a compelling brand. But the degree of difficulty of Paul's 2016 campaign may exceed even his formidable skills.
—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.