> You are correct, but unlike with banks, at least there is an escape hatch: "not your keys, not your coins", which is a lot simpler to implement than walking t

> You are correct, but unlike with banks, at least there is an escape hatch: "not your keys, not your coins", which is a lot simpler to implement than walking to your bank and withdrawing all your savings in cash. To be clear: "Not your keys, not your coin" equivalent in the fiat world is not putting your money in the bank, but holding on to it instead. So you put all your fiat in a safe eg. > Sadly, the vast majority of Bicoin buyers just leave their coin on the exchange (or worse: in the case of Paypal, they can't do anything else), thereby opening the door to all kind of shady practices, including FRB. In order to short bitcoin on the exchanges, the exchanges need to have bitcoin to lend out. Naturally these lent bitcoin come from deposits. Exchanges are already practicing FRB on a large scale, but somehow nobody is calling it that (mostly because FRB is not well-understood by the bitcoin community.)