I know what fractional reserve banking is. I mean how do you think it relates to bitcoin?
A simple example would be Coinbase loaning out the bitcoins they hold.
I am determined to understand this. So....
Lets say coinbase hold 10,000 bitcoins. Going with fractional reserve they lend out 1,000,000 bitcoin. How are they going to send them? An amendment to the protocol?
they will probably create fake bitcoin, by imputing fake numbers(in your account) like they are doing all the time with fiat, then they will probably cover their ass if another one deposit on their wallet, they will surely not lend 1M if they had 10K, but at best 20K