George Selgin: Money, Banking and Bitcoin : Bitcoin

Interesting prediction from Hal Finney about "Bitcoin-backed banks (...) issuing their own digital cash (...)" and more efficient systems

This quote is from 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."
About Hal Finney: Harold Thomas Finney II (May 4, 1956 – August 28, 2014) was a developer for PGP Corporation, and was the second developer hired after Phil Zimmermann. In his early career, he was credited as lead developer on several console games. He also was an early bitcoin user and received the first bitcoin transaction from bitcoin's creator Satoshi Nakamoto.
submitted by Ph03n1xII to lykke [link] [comments]

George Selgin is a Senior Fellow and Director of the Cato Institute's Center for Monetary and Financial Alternatives, where he is editor-in-chief of the Center's blog, Alt-M, Professor Emeritus of economics at the Terry College of Business at the University of Georgia, an associate editor of Econ Journal Watch.Selgin taught at George Mason University, the University of Hong Kong, West Virginia ... use the following search parameters to narrow your results: subreddit:subreddit find submissions in "subreddit" author:username find submissions by "username" find submissions from "" Bitcoin's intrinsic value has been heavily discussed in the crypto community this week following a remark by the governor of the Bank of England suggesting that the cryptocurrency may have no ... limit my search to r/Bitcoin. use the following search parameters to narrow your results: subreddit:subreddit find submissions in "subreddit" author:username find submissions by "username" find submissions from "" url:text search for "text" in url selftext:text search for "text" in self post contents self:yes (or self:no) include (or exclude) self posts nsfw:yes (or ... George Selgin, ein Experte für Free Banking Theorie, referiert auf Wertangebot von Bitcoin in Bezug auf die Unfähigkeit , seine Versorgung zu steuern (dh Inflation Targeting): Es folgt nicht jedoch, dass entweder Bitcoins Kaufkraft oder das Volumen der Bitcoin-denominierten Zahlungen stabil genug sein wird, Bitcoins niemandes Idee eines Klanges, Geld zu verdienen.

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