we shall see, not selling anything, only buying.
Well, at least, on a personal level, you have not been shaken that far into SCARED status.
On the other hand, the way you express your worry, you might need to reallocate a bit into one of those other projects if you think that they are so wonderful in terms of potentially flippening bitcoin or whatever it is that you think might be so great about WBTC that is supposedly providing a greater threat (greater competition) in order that BIG blocker nonsense like jbreher pales in comparison (from your kumbaya-singing wannabe perspective).
Fractional reserve banking is mathematically impossible with Bitcoin. Because fractional reserve banking is not what most people think it isit is worseit creates money out of thin air, whereas it is impossible to loan new bitcoins into existence out of nowhere.)
You should know better than that nullius.
Whenever a third party holds bitcoin, they can act like they have more bitcoin than they have. So they can do it... Can they get away with it, might be another question.
Sure, when push comes to shove, if the bitcoins are claimed by those who believe that they own such bitcoins and the third party does not have such bitcoin, then they could be fucked - depending on if the law is on their side... but sure the people who entrusted their bitcoin to such third party could get fucked, too.
And, sure part of the power of bitcoin is to be able to demand immediate custody, and they cannot convincingly say that it is in process and the security guards and trucks are getting in place, blah blah blah..
Within seconds the proclaimed owner can demand custody... and such proclaimed owner is going to be a dumby if he creates relationships with third party custodians who are not actually holding a sufficient quantity of coins to cover his request for immediate delivery.
Anyhow, I agree with you that attempting to engage in fractional reserve banking could be much more problematic for the third party custodians who engage in such, and perhaps actual BTC owners are going to realize that they cannot trust certain third parties to hold their coins, so they will choose to either hold the coins themselves or find a third party custodian that can be trusted (and or verified).