Question: why is eCash not a Bank of Amsterdam circa 1781 2.0; you know, when it went from a money warehouse - settling payments by simple book entries - to issuing banknotes in excess of its money holdings; i.e. a fractional-reserve bank? nostr:npub1h8nk2346qezka5cpm8jjh3yl5j88pf4ly2ptu7s6uu55wcfqy0wq36rpev nostr:npub12rv5lskctqxxs2c8rf2zlzc7xx3qpvzs3w4etgemauy9thegr43sf485vg nostr:npub1sfhflz2msx45rfzjyf5tyj0x35pv4qtq3hh4v2jf8nhrtl79cavsl2ymqt et. al. 🔶👀
Discussion
It could be & will be in certain cases.
The distinction is that the risk is pushed to the outer layer of the network.
Shitty mints will disappear from time to time. The more trustworthy ones will last longer & become bigger.
The risk of being rug pulled will always be there but they don't present systemic risk to the network.
Reputation is important in Bitcoin. It's hard to establish & takes time, but can be lost very quickly.
I expect there'll be many mints & other layer 3 options to choose from all with similar but different tradeoffs. This is all good for Bitcoin. It's good for normies that can't afford a UTxO yet or can't remember 12 words.
Because MtGox and FTX are what happen to those banks. Of course there will be fractional reserves from time to time. But it will be punished like it always has been.