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0 pointsdogma11388y ago0 comments

As I pointed out no where was stated that it’s not technically possible but that it’s not practiced or supported by current mainstream cryptos.

If anything some of the larger blockchains “naturally” move towards a “central bank” like model.

Say you have a blockchain that requires you to sync 100’s of terabytes if not petabytes of information to setup a new node and 100’s of gigabytes a day to keep it upto date.

It’s not going to be feasible for individuals to talk to it directly.

Now you already have exchanges that keep ledgers other than the blockchain and that already do most of their transactions off the blockchain these are your banks.

In this model the blockchain essentially offers only value store for the exchanges and keeps only the exchanges honest this is essentially your central reserve.

The blockchain offers also a consensus protocol where either the miners if it’s PoW or the exchanges if it’s PoS hold the important seats, that’s your board of directors.

So yes I don’t think that current crypto is incapable of mimicking the model of banking we currently use some already do it unintentionally to some extent.

But currently there isn’t a single crypto that offers a built in fractional reserve and credit system as part of its blockchain its off possible to implement it.

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brian_cloutier8y ago· 1 in thread

That's not really true though. For one:

> supported by current mainstream cryptos

There's nothing that needs to be supported. Bitcoin already "supports" it, in the same way that cash does. All you have to do is find a counterparty and draw up a contract.

> it’s not practiced

That part's mostly true because with this kind of volatility who would risk owing you a bunch of bitcoin, but loans involving Bitcoin are starting to appear: https://saltlending.com/

I wouldn't necessarily trust https://www.bitbond.com/ with _my_ bitcoin, but theoretically I could, and this is starting to look a lot like fractional reserve.

dogma1138OP8y ago

Ofc it has to support it you can’t loan more bitcoins than you have unless you use some other tools like say options by even that isn’t straight forward unless you have a clear secondary settlement process.

If you want to do fractional reserve in say crypto you need to have a blockchain where the “bank” can print crypto like they do with current currency until then it’s off the books accountign or a ponzy scheme like MtGox.

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