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> Blockchain is a fractional reserve system... I'd argue that it is the opposite since you can't receive 1 bitcoin and produce 10 bitcoins through the magic of

> Blockchain is a fractional reserve system... I'd argue that it is the opposite since you can't receive 1 bitcoin and produce 10 bitcoins through the magic of a fractional reserve system (unless, of course, you run one of the exchanges and keep the transactions local). If you have 1 bitcoin you can only spend/loan/destroy 1 bitcoin as the blockchain prevents double spending.

jondubois 8y ago
But it's a fractional reserve system with respect to fiat currency. The price of Bitcoin is supported only by a fraction of its market cap in real fiat money. If everyone decided to sell all Bitcoins in existence on the open market, the total amount of fiat that they would get for it would not match the total market cap of all Bitcoins before the selloff started.
- UncleEntity 8y ago
  That's not really the way fractional reserve works but merely the result of normal market pricing through supply and demand.