This is the part many (most?) bitcoiners fail to grok about fractional reserve free banking. The banks keep each other in check.
Discussion
Canada had a super successful and stable private banking system in the late 1800s. Totally different than the US system that only allowed banks to operate within a state and notes centrally cleared. In contrast, Canada allowed branch banking across the country. So if you wanted to clear notes, you walked across the street to clear with the other bank, instead of having your bank send the notes to clear in Toronto.
π₯π₯π₯ Somebody has been doing their homework. π
Not to name-drop, but an exchange I had with George Selgin about 4 years ago, put me on this trajectory. I also read Larry Whiteβs book on private banking on the success in Scotland.
When #cashu dropped in 2022, I realized that a whole new private micro-banking system could be built. Been on that path ever since with #nostr #safebox
Doin' it right
I'm sympathetic to this view, it's not however clear to me whether free banking on top of gold was a solution to the technical limitations of the time and if it would make sense on top of Bitcoin (yes it's slow, but still much much faster and cheaper than transferring gold was)
Are there any more structured opinions on this that anyone knows?
Read Lyn Alden to understand why gold failed and how bitcoin solves those problems.
Gold settlement was too slow, risky, and hard to verify. The telegraph made physical settlement obsolete and centralized gold reserves.
Gold is physical so it is vulnerable to capture by whoever has the biggest guns. The government simply captured the centralized gold reserves and forced everyone onto a fiat standard.
This is what will happen to all the ETFs, exchanges, and treasury companies. Saylor's bitcoin will be the national reserve. History rhymes.
Yup, read Lyn Alden's book, too. My big takeaway was the impedance mismatch between clearing (telegraph) and settlement (gold) is the root of instability.
Fixed with ecash and bitcoin.
Lightning Network is the telegraph , Cashu is the IOU and Bitcoin is the gold.
But you also need a reputation layer. That's nostr and it's cryptographic keypairs. IMO. Which I'm thinking about more in context of the immutable nature of btc transactions.
Yup. Iβm hoping that nostr:npub176p7sup477k5738qhxx0hk2n0cty2k5je5uvalzvkvwmw4tltmeqw7vgup and nostr:npub1cn670f663n3ks02jnnlsvd5y88zjnefy8343ykaxs7y3nzzketrsrjwt8a can crack the reputation, attestation problem.
My sole focus is access to funds and records.
You certainly will. I have faith in you. π
nostr:nprofile1qqs0dqlgwq6l0t20gnstnr8mm9fhu9j9t2fv6wxwl3xtx8dh24l4auspz4mhxue69uhkzat5dqhxummnw3erztnrdaksz9nhwden5te0d4kx26m49eex2ctv0yhxcmmv9uq3gamnwvaz7tmjv4kxz7fwv3sk6atn9e5k7dj6rpa and I yet to connect directly. This needs remedying!
Thanks, great points! I'm familiar with Lyn's work, which I find has a lot of explanatory power.
I think free banking on top of Bitcoin might emerge and we might find out that it works pretty well since falling back to self custody is so much easier with Bitcoin than wiith gold.
As for Saylor's stack becoming the government's, interesting take
It's not true though is it? Banks are too big to fail and get bailed out.
Crony state banking in a nutshell. π₯σ σ σ £σ σ ₯σ ²σ σ ’σ Άσ €σ σ ³σ Ίσ σ σ Έσ σ §σ σ ͺσ σ ¦σ Όσ ’σ ‘σ σ σ σ σ ₯σ σ σ σ ₯σ σ σ Ίσ σ σ Έσ ½σ ₯σ σ ’σ Άσ ͺσ σ ³σ ©σ ³σ σ σ σ σ σ ’σ σ ₯σ σ σ σ σ σ ’σ Άσ σ σ σ σ ²σ σ σ Άσ σ σ ±σ ²σ σ ²σ σ ΄σ §σ σ σ Άσ ·σ σ σ ³σ ²σ σ ·σ Άσ σ ·σ ³σ ²σ σ σ £σ σ ±σ ½σ σ σ σ ½σ σ σ σ Ώσ σ Ίσ σ ½σ ΄σ ½σ €σ σ σ σ ¨σ σ ΄σ σ ‘σ σ σ ±σ ©σ Ώσ ·σ ½σ £σ Ύσ ·σ σ σ σ σ ΅σ ‘σ σ σ σ ₯σ Ύσ ͺσ ΅σ £σ σ σ σ ₯σ ½σ ΄σ ½σ ͺσ σ σ σ £σ ½σ σ σ ͺσ Ώσ σ σ §σ σ σ ΅σ §σ σ ’σ σ §σ Ώσ ΄σ σ ͺσ σ σ σ £σ σ σ Άσ σ σ ³σ ΅σ ΄σ σ σ £σ ±σ ‘σ ±σ σ σ σ σ ΅σ Όσ σ Ήσ Ήσ ©σ σ σ ‘σ ’σ §σ ©σ ¨σ Έσ σ σ ©σ ₯σ σ ͺσ ¦σ Ίσ σ σ ²σ £σ ©σ ¨σ σ σ ©σ σ σ σ σ »σ Ύσ σ σ σ σ σ σ ΅σ Ήσ ³σ §σ £σ ‘σ ₯σ σ ’σ σ Ώσ σ Ύσ σ ΄σ σ ’σ σ σ σ §σ §σ σ ’σ Ίσ σ σ ©σ σ σ ·σ σ §σ σ ·σ σ ²σ ₯σ ¦σ σ σ Ίσ σ σ ‘σ σ σ σ ͺσ Όσ ±σ Ύσ ½σ ₯σ σ σ Ύσ ’σ σ σ ‘σ σ σ £σ ΅σ Ίσ §σ ’σ Ύσ σ Άσ σ ©σ §σ σ σ σ €σ σ ‘σ »σ ³σ σ σ ©σ σ ‘σ ‘σ σ σ σ σ σ σ σ σ £σ σ σ σ σ σ ©σ Ώσ σ ½σ σ σ ₯σ σ ³σ €σ σ £σ σ σ Άσ ·σ ¦σ σ σ €σ ³σ £σ σ σ ½σ ’σ §σ ¦σ σ σ σ €σ ¦σ ©σ σ ±
This makes me think about nostr:nprofile1qqs9pk20ctv9srrg9vr354p03v0rrgsqkpggh2u45va77zz4mu5p6ccpzemhxue69uhk2er9dchxummnw3ezumrpdejz7qgkwaehxw309a5xjum59ehx7um5wghxcctwvshszrnhwden5te0dehhxtnvdakz7qrxnfk's mint auditor
I've been trying to grok a relationship between pricing mint credit risk, LN liquidity, and miner revenue.
Exiting a mint incurs fees, and fees are what power LN and the base layer. Miners will ultimately want predictable fee revenue. Are hashrate derivatives the glue that binds them together?
Yeah check out what BlockSpaces does
Nailed it!
Imagine a proxy mining pool that operates as a community ecash mint and mines up lightning liquidity from block rewards.
Package it up as a self-hostable binary and suddenly anyone on earth (or off it) with access to electrical generation capacity can bootstrap a local economy from nothing.
This is the future I want. A more free and fair world for my kids' kids.
great project! <3 calle π