What narrative?
Hal Finney in 2010:
"Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.
Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others.
George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.
I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today."
https://bitcointalk.org/index.php?topic=2500.msg34211#msg34211
Engineering isn't a place for magical thinking. It's a place for trade-offs. Fortunately, tech has improved since Hal Finney's remarks in 2010. We have the Lightning network, side chains, apps that let you spread funds out across multiple different private chaumian mints, multiple ongoing research paths (eg bitcoin scrypt, zk proofs, etc).
LynAlden / Lyn Alden
npub1a2…cw83a
2023-12-16 19:16:38
in reply to nevent1q…sfnz
Author Public Key
npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83aPublished at
2023-12-16 19:16:38Event JSON
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"content": "What narrative?\n\nHal Finney in 2010:\n\n\"Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.\n\nBitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others.\n\nGeorge Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.\n\nI believe this will be the ultimate fate of Bitcoin, to be the \"high-powered money\" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today.\"\n\nhttps://bitcointalk.org/index.php?topic=2500.msg34211#msg34211\n\nEngineering isn't a place for magical thinking. It's a place for trade-offs. Fortunately, tech has improved since Hal Finney's remarks in 2010. We have the Lightning network, side chains, apps that let you spread funds out across multiple different private chaumian mints, multiple ongoing research paths (eg bitcoin scrypt, zk proofs, etc).",
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