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How can banks work without a fractional system? What is the purpose and value of banks in that scenario?

• toast0 5y ago
  There's no reason you can't operate a fractional reserve lending operation with bitcoin. You also don't need a central bank or other authority either. It's as simple as taking a deposit and loaning out some of it. And hoping you get payments or more deposits before people want their deposits back. There's even value in not taking deposits, but just loaning out founder/investor's capital. Although maybe that's just a weird deposit. I'm not sure how to make deposits useful without lending out some of them, though. I guess just money is less likely to be stolen in a bank than under your pillow, but probably not in a cryptobank.
• ilammy 5y ago
  The value is in that the bank has more capital than you. Consider the case of islamic banking, for example. You could think that lending money without charging interest is completely bonkers and it’s impossible to make a business that way. However, by thinking out-the-box you can get an arrangement which is favorable to all involved parties.