2 ms·
Bank deposits are legally enforceable claims on money, which means they're... money, regardless of whether they are fully backed or partially backed by reserves
by lottin 5y ago
Bank deposits are legally enforceable claims on money, which means they're... money, regardless of whether they are fully backed or partially backed by reserves. It doesn't make any difference. And the same applies to bitcoin deposits on exchanges, which are nothing more than legally enforceable claims on bitcoins. In other words bitcoins. Why are you struggling so much with this? I mean... it's pretty basic stuff.
- fleddr 5y agoYou're the one struggling. You just agreed with what I said earlier: you did a swap from real Bitcoin (actual BTC that was mined and sits in a wallet) into a "promise" of said Bitcoin. That doesn't increase the BTC supply. It's just shadow book keeping outside the blockchain. You made new "money", not new BTC.
- lottin 5y agoReplacing an asset (reserves) with another asset (a loan) is not "shadow book keeping". But anyway... there is no such thing as actual bitcoins sitting in wallets. A bitcoin "wallet" is not a wallet but an ID. And there are no bitcoins either. There is only a transaction record of fictional tokens. These tokens (aka bitcoins) are created by appending an unbalanced transaction into the transaction record. This is shadow book keeping. But conceptually it shows that bitcoins are created with a simple bookkeeping entry. And more bitcoins can be created with the process that I described earlier known as fractional reserve banking. Again, this is all simple stuff that can be corroborated easily with minimal effort. This conversation is over as far as I'm concerned.