> This article seems to glorify the idea of people keeping money out of the banking system to avoid banks making money off interest spreads. The problem with b

> This article seems to glorify the idea of people keeping money out of the banking system to avoid banks making money off interest spreads. The problem with banks is not that they make money off of interest spreads. The problem is that banks are an integral part of the fiat money system that allows the creation of new money too easily. (Banks create money by lending out money held in demand deposits. For example, if I deposit $10 in my checking account and the banks lends out $5 of it, then I still have my full $10 to spend while the borrower has $5 of new money. This is called fractional reserve banking.) Bitcoin, because it is fixed in quantity, cannot be used in a fractional reserve system. > But our economy actually relies on capital being available through banks. Our economy relies on investment which can be defined as resources directed towards creating value in the future rather than in the present. By aggregating the resources of many individual savers and making them available as business loans, banks facilitate investment. They could continue to do this with bitcoin. > How would people having all their wealth in bitcoin be any different than people keeping cash under the mattress ...? Banks are better than mattresses because they are more secure and they make transactions easier. You can't wire money from your mattress or write a check against a mattress account. Bitcoin is more like a bank account than a mattress in this regard.