3 ms·
> You do realise that Bitcoin is experiencing much more inflation in its supply than the USD or the EUR, don't you? So, I argue that it seems likely this would
by lsc 8y ago
> You do realise that Bitcoin is experiencing much more inflation in its supply than the USD or the EUR, don't you?
So, I argue that it seems likely this would happen; 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?
- ric2b 8y ago> 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.
- lsc 8y agoI 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.
- nivertech 8y agoFractional 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.