Re:The Bear Case for Crypto, Part II: The Great Bank Run
by pjbyrne on Monday November 27, 2017 @05:41PM
(#15792314)
Bitcoin itself is a fractional reserve system.
Re:The Bear Case for Crypto, Part II: The Great Bank Run
by coryl on Monday November 27, 2017 @05:53PM
(#15792425)
Fractional reserve systems have fixed maximum supply of currency?
According to the Bitcoin protocol, only a maximum of 21m BTC can exist. And that they are created via mining in a predictable schedule.
Respectfully, I think you need to revisit Bitcoin fundamentals.
Re:The Bear Case for Crypto, Part II: The Great Bank Run
by pjbyrne on Tuesday November 28, 2017 @07:15AM
(#15796500)
Nobody thinks of BTC in BTC terms. They think of it in USD terms, and right now the notional amount of BTC is higher than the amount of USD that will be available to meet it in the event of a very sharp correction.
At least, that's my view. We'll see if there's a flight to liquidity when the bubble in Bitcoin's price finally pops.
Re:The Bear Case for Crypto, Part II: The Great Bank Run
by stale2002 on Tuesday November 28, 2017 @12:05PM
(#15799035)
OK, so in your world Bitcoin is an overpriced bubble.
That's a reasonable position to have. I think it is overpriced too.
It still doesn't make it a 'fractional reserve system'. It instead means that the price is to high.
These are different things, that have nothing to do with each other.
But this is only a problem if coinbase or whoever is acting as a fractional reserve system.
As far as I know, every single dollar and Bitcoin that coinbase "says" you have is actually in an account somewhere, dollar for dollar and Bitcoin for Bitcoin.
If this is NOT true, and coinbase is a fractional reserve system, that would be a huge scandal.