A simple question to the forum - I hope that people can provide sensible answers, since it would be way too easy to preach rather than to reason.
It has been mentioned many times in the forum that banks can be killed by bitcoin and that crypto is a threat for central banks, etc... One of the reasons that make me doubt about that possibility is the worldwide need of having a strong lending and borrowing system. I think that currently DeFi does not offer a realistic solution and that lending eventually has to rely on an intermediary. That, in some way or under a different name, is a bank.
How is this problem addressed currently and how could it be solved at large scale without a "bank" of shorts?
I don't think it can kill banks. It is possible that they co-exist but not killed banks. As for lending, I think it is not possible on bitcoin. It was not under bitcoin because it was decentralized and it was volatile. There are many reasons why people need banks, and lending is one of it. Banks already set rules and have a fixed systems about it. Or the payment was already fixed. While if it is in bitcoin where the price goes up and down it can be confusing and complicated.