Quote from: relative on June 27, 2011, 05:47:15 PM

Quote from: qualia8 on June 27, 2011, 04:00:24 PM

Quote from: Funkypala on June 26, 2011, 11:32:53 AM

Thats what i mean. What is preventing the Bitcoin economy from becoming the shitty and evil thing our dollar economy is right now?

In the current system, you can lend out like 10x your own reserves. If there's a run on your bank, the central bank will print more dollars and keep you afloat. That can't happen in bitcoins, because there's no printing new bitcoins (above what mining does).

false. bitcoin banks can lend out 10x, too. if there is no minimum reserve requirement imposed on them, they can lend out 100x or 1000x if they want to - and if they find enough stupid people who deposit coins with them.

there is no "printing" involved when commercial banks create money. look up base money supply and the money multiplier.
money multiplier can be > 1 in a bitcoin economy, too.

factional reserve banking isnt a problem in itself. the problem is that govts insure the risks of it, so noone even cares where his money is deposited and what kind of stupid shit his bank does with it.

Right. We don't desagree here. They can, in principle, lend 10x reserves, but they have to find depositors who are willing to take that kind of risk. Who in their right mind would keep a savings account generating .3% APR when the bank is lending 10x their deposit, if there is no FDIC, no Federal Reserve? Read the rest of my post. They'd charge exorbitant interest rates for this and still may face bank runs. (That's why FDIC / Fed came about in the first place, to calm that wild west shit.)

Good luck trying to run an actual bank that lends 10x reserves. You'll need a hell of a marketing team.