I started to think about it. How a bank and folks could issue loans to people?
Currently, when you need to borrow money, your banker just edits your balance account and create money magically. You then pay back monthly.
Banks won't be able to do that with Bitcoin with its limited supply. You can't print bitcoins.
But now, between folks. Let's say I'm the banker and you're the customer looking to borrow money to buy a house. I can lend you the money but how to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.
The way you just described, it' seems dumb. How old are you, 6? If you are an adult you wouldn't be saying that banks are creating money magically. When you take loans from banks, they are giving you the money from their own wallet and expecting you to pay it back within a giving time and also pay the interest. So the money is not being created magically and digits poured into your account balance. Even when you want to deposit money into your account, do you go there and tell them to create money magically? It's the money you give to them that is being kept and recorded for you.