On the issue of Fractional reserve banking being a fraud or not, I just want to point out that we individuals would go to jail if we started lending several times money people entrusted to us. But never mind.
Individuals are not banks. There is a special set of regulations that allows banks to do what they do. These do not extend to individuals (unless those individuals decide to open a bank
)And please explain to us all why banks should have this special privilege? And tell me what is the Blockchain for?
The only reason it is a special privilege is because the government labels anyone who does so a bank. You can't bank without being a bank and therefore only banks are allowed to bank. If regulations did not restrict the ability of individuals to privately borrow and lend money, anyone could do it. As long as they were responsible about it there would be nothing wrong.
By the way, fractional reserve banking is nothing more than borrowing money to invest it. For example, I would be engaging in activities very similar to FRB:
1: If I borrow money on a site like BTC Jam and then loan it out at a higher interest rate, or if I buy Bitcoins using money from my credit card and then loan out those Bitcoins.
2: If I borrow money on a credit card to buy stocks at an IPO, since a stock is essentially a loan to a company secured with partial ownership (to be more accurate I could buy bonds).