Vis a vis exchanges: I think some exchanges don't intend to be fractional-reserve or bucket-shops at first, but end up becoming bucket-shops, because if they're hacked or lose coins due to a bug, it is easier to fib that they're still solvent and remain popular than tell the truth and make everyone panic to withdraw. Easy for them to fool themselves that "we'll just keep it under wraps while we figure out some way to get solvent again".

Of course, it's hard to distinguish that situation, from the outside, against a situation where they planned to fool around with the deposits from the beginning.

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In the more general sense, though, I think the effective monetary base being able to grow bigger than the underlying asset, is impossible to avoid if we expect people to ever use BTC as money, because any lending activity at all increases M2/M0.

Imagine that I loan 100 bitcoins to someone. Afterwards, they have 100 bitcoins, and they have a 100BTC debt to me. And I now have a 100BTC credit against them.

For the moment, let's assume that the borrower is very low risk of defaulting. A well trusted, rich person with plenty of assets to seize if they default.

Now, this means that the market value of my 100BTC credit against them is really 100BTC, right?
And I can sell this debt on to people, for the same value as a bitcoin itself.
There have even been Bitcoin ETF proposals that base their asset management strategy on such an idea - buying BTC futures on CBOE rather than holding the bitcoins directly & having to worry about key control and so forth. These are debt instruments, not bitcoins, but if they are worth exactly the same amount as bitcoins at market, they still increase the "supply" of BTC on the market, don't they?

This is similar to how many countries use US dollars as a reserve currency, but they don't hold physical bills - they hold some treasury bond or long-term CD so they can at least get a little interest payment on it.

To imagine that Bitcoin will go mainstream and yet avoid this fate, you need to somehow imagine that people will stop borrowing money, which seems impossible in a world that invented debt long before it invented coinage (see also).