Richard Stallman: We Can Do Better Than Bitcoin

Re:Richard Stallman: We Can Do Better Than Bitcoin by ric2b on Wednesday November 28, 2018 @06:51AM (#18550816)

> someone will figure out how to fractional reserve the stuff, the gain is too great. But do you have evidence that it did happen? what was the mechanism?

If the transaction is not on the blockchain or is not directly tied to a blockchain transaction (like with LN/payment channels), you MUST assume there's a fractional reserve going on, as you have no way of confirming otherwise.

If it is tied to the blockchain, it can't be a fractional reserve.

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Re:Richard Stallman: We Can Do Better Than Bitcoin by nivertech on Friday November 30, 2018 @12:54PM (#18570901)

Fractional reserve is not about transactions, but about backing for the underlying assets these transactions are "moving".

LN/payment channels are payment methods (think checks or credit cards), while traditional "cryptocurrencies" are systems or records or ledgers (think banks).

The assets are fiat cash and cash-equivalents (electricity, hashing power) inflows. I.e. when somebody mines or buys Bitcoin - money flows into the system, when somebody sells Bitcoin - money flows out of the system. So most cryptoassets today are fractional reserve.

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Re:Richard Stallman: We Can Do Better Than Bitcoin by lsc on Thursday November 29, 2018 @04:07AM (#18558979)

I agree completely.

But my impression was that actual blockchain transactions were cumbersome and slow to verify, and that most people, especially most investors, have some other party holding their coins or otherwise invest indirectly.

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