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None. Suffer. (lemmy.world)

submitted 4 days ago by Stamets@lemmy.world to c/whitepeopletwitter@sh.itjust.works

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[–] Tar_alcaran@sh.itjust.works 2 points 3 days ago

Well, you can't do fractional-reserve banking with bitcoin (or any other coin I know of), so in that way, a "run" on a bitcoin can only ever exhaust the supply. lending out more than you have requires trust, and that's not available in a blockchain structure.

On the other hand, fractional reserve banking is the foundation of all modern financial systems, so it's not really a thing we're going to scrap.

It would be useful for things like deeds and contracts. Instead of having a bank hold it and provide proof you could store it on the blockchain. There are a handful of good uses for it, but it’s generally not useful for the stuff most people think it would be.

Well, yes but no.

There's a lot of problems with blockchain deeds, and one of the big ones is confirming the first owner. What's to prevent me from minting a smart-contract that says I own your house? Or that I own a house that doesn't even exist? In the real world, we've solved those problems (and MANY more) with notaries and central registration systems. At the interchange of digital-ownership and real-world, physical assets, you're always going to need a trusted party to verify that the two match. And at that point, you don't need the blockchain at all.