I think banking on Bitcoin just returns US to the time before too-big-to-fail banks incentivized large scale greed.

I would imagine greed is a mark of a beast.

So as long as the Bitcoin bank isn't greedy, I think it could be really optimistic as local banks build local economies.

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That's the ideal scenario, which imo would be attainable if we had an unknowably large number of small banks doing it. There's the rub...

What will happen when borrows abscond? What reaction will that provoke?