Hello all,


I notice that there are a lot of misconceptions about fractional reserve banking flying around here. There is a great confusion between the current government central banking fiat currency system (which HAS and DOES print money out of thin air) and sound fractional reserve banking. They are not the same and FRB need not be inflationary. In fact, when done properly there is very little difference between a fractional reserve bank and a 100% reserve bank. A 100% reserve bank can earn just as much money and get just as much interest as a fractional reserve bank. Yes, possibly even more. I describe how this can be done in the following article:

http://onarki.no/blogg/2011/04/fractional-reserve-banking-vs-pure-gold-standard/


However, due to the hyperdeflation in bitcoins at the moment banking is currently impossible. A proper bitcoin bank must wait until the value stabilizes.