> "fractional reserve banking" would be the case if Coinbase lends more than it holds in their accounts. That's impossible with bitcoins. That is definitely n

> "fractional reserve banking" would be the case if Coinbase lends more than it holds in their accounts. That's impossible with bitcoins. That is definitely not impossible. Let's go through this step by step: I start by depositing one bitcoin to coinbase and agree that coinbase is allowed to lend that forward, but will give me back one bitcoin whenever I request so. Coinbase promptly lends the bitcoin to you. You, then, go ahead and buy stuff from me with the bitcoin, and I go back to Coinbase and make a second deposit. At this point Coinbase owes me two bitcoins. Then you need another loan, call again to Coinbase and borrow another bitcoin. Now Coinbase has lent you total of two bitcoins even if there is only one existing in the whole fictional universe. Now, you can see a couple of interesting further observations from here: First one is that quite soon people and coinbase figure out that it is very cumbersome to move actual bitcoins around, and it would be much more efficient if instead of me requesting one bitcoin back to now make an purchase from coffee shop, I just ask that Coinbase owe me one bitcoin less and the coffee shop owner one coin more. The second one is that after this, the coinbase deposits are equivalent to bitcoin as money in economy. For the coffee shop owner it is irrelevant whether I pay with bitcoin or a coinbase dposit, the economical value is identical. What this then means is that the money supply of bitcoin economy is not fixed as bitcoin people expect, but the coinbases of bitcoin economy will create a chaotic supply of bitcoin money. Whic, of course, will cause bitcoin value to fluctuate chaotically to the end of the days. Finally, there exists no institution, mechanism or whatever in bitcoin to stop this development. Nobody is able to prohibit fractional reserve banking and nobody is able to stop money creation in bitcoin economy. Sorry, but to me, bitcoin is destined to fail as a money.