So bitcoin banks can loan out your money. What they cannot do (i think) is create new money the way normal banks do. If I lend the bank $100, the bank can turn that into $150 credit + $50 debt. Then it can loan out $120 dollars. I think that’s impossible with bitcoin, which is an important and good feature of the currency. But I thought the article was saying bitcoin banks can do that.
So they can’t create new BTC but they can loan it out and display to you that you have BTC balance when they don’t actually have it in their possession, just like banks. BTC in a centralised exchange on in a bitcoin bank is not real BTC. It does not have the same properties as BTC.
Oh I understand. Thanks.
So bitcoin banks can loan out your money. What they cannot do (i think) is create new money the way normal banks do. If I lend the bank $100, the bank can turn that into $150 credit + $50 debt. Then it can loan out $120 dollars. I think that’s impossible with bitcoin, which is an important and good feature of the currency. But I thought the article was saying bitcoin banks can do that.
So they can’t create new BTC but they can loan it out and display to you that you have BTC balance when they don’t actually have it in their possession, just like banks. BTC in a centralised exchange on in a bitcoin bank is not real BTC. It does not have the same properties as BTC.