Oddbean

What was Hal referring to when he mentioned interest rates there? Where is that interest coming from? Not saying I support the idea, but just bringing it up for discussion as it’s basically what Saylor is suggesting.

I’d think the interest is coming from people who borrow and plan to pay back more sats than they borrowed. However, since there is no way for the bank to create more bitcoin, if they make a bad loan both the bank and depositors are at risk. Depositors will be very attentive to the banks lending practices and the banks will be very conservative in their lending. I’d imagine many banking structures, included reserve lending, will exist to accommodate both the high risk/high reward and the low risk depositors. In fact some customers may just pay a fee (negative interest) to be at an institution that is more a custodian than a lender.

I’m sure it would change lending. And while the underlying bitcoin supply couldn’t be increased, if these banks issued their own currency backed by Bitcoin, which is what Hal suggested in that post, and he even went so far as to say some could be fractional reserve, then they could inflate the supply of that currency with which to to pay the interest on Bitcoin deposits. To be clear, I’m not advocating in favor of such a system as it feels to me like a stepping stone right back to where we are now with the fiat system. But I think the fact that so many bitcoiners are emotionally charged right now over what Saylor is suggesting, and yet here is Hal discussing it within a year of Bitcoin’s creation, it at least needs to be brought up and discussed intelligently rather than based purely on emotion.

I agree, and I think Hal was right that there will be banks. Hal was early and probably would have refined his ideas with the advent of liquid, lightning, mints, etc. If they day ever comes that I have BTC in a bank, them creating there own currency that is not 1:1 sats will be the day I start the bank run😎

Yea I’m not meaning that whatever Hal said here should be set in stone as gospel, but merely that it’s not a new topic and Saylor’s ideas probably aren’t all that novel about it. I won’t be depositing my sats anywhere either, for what it’s worth. Recent history has shown all too clearly the risks of chasing yield.