ponymontana🦄⚡ on Nostr: This note is a thinkering about full-reserve banks and scalability #ecash is a "how ...
This note is a thinkering about full-reserve banks and scalability
#ecash is a "how to do a better bank" protocol, in case of #cashu is based on bitcoin.
Banks are not necessarly bad, especially when it is a not-enforced opt-in service that one can choose (as for all things, drugs=bad, choosing-drugs-if-is-the-fuck-you-want=good).
Now the sauce, the unpopular opinion:
<< Large-scale fractional-reserve banking is bad, especially if we want to defeat a central authority that can repay printing money in case of bankrupts.
Little-scale fractional-reserve banking is mostly neutral, nor bad nor good. >>
Now take the uncle Jim cashu mint as example: he runs a mint for ~50 people, he started with his close relatives and now other friends has started trusting him with their money to have a reliable cashu-based near-zero-fees "homebanking" service. They didnt give in his hands all their wealth, just some portions of it.
Some local stores in the city are now familiar with uncle jim mint and they "dont swap immediately the all the jim-sats after being paid"; they put some trust in Jim, they store some so they dont pay lightning fees for swappin, and instead they spend directly the jim minted sats in other stores.
This is a mental experiment for a small scale bank; in the city there are a lot of uncle jim and a lot of analogous situations, some bigger, some smaller, some trusty, some evidently recognized as scammy.
Why, in this case, Jim doing fractional reserve is neutral?
Because Jim is involved in the community, he has skin in the game, he has great advantage in being a good person. He will beaten and his family will be upset (and, theirself, at risk) if he start act malicious.
He can literally phone to most of his user in one day and just propose if its ok for them if he use some bitcoin to buy a new server, he will have the money after a month. There could be no problem with fractional reserve, is a neutral option.
Its one of the multiple ways Jim could act maliciously, but in a small scale it would easily catched; on a small scale it becomes pretty indistinguishible from a bankrun.
In conclusion, I think cashu wouldnt benefit much from solutions to give users "imperfect proofs of full reserve"; it will greatly benefit, instead, in a focus and optimizations of the protocol to make easier to have networks of little mints instead of remote-managed big ones.
In case the old Jim will fool me I will keep for myself his robot lawnmower he lent me, thats no problem.
calle 👁️⚡👁️ (nprofile…82wz) what do you think?
#ecash is a "how to do a better bank" protocol, in case of #cashu is based on bitcoin.
Banks are not necessarly bad, especially when it is a not-enforced opt-in service that one can choose (as for all things, drugs=bad, choosing-drugs-if-is-the-fuck-you-want=good).
Now the sauce, the unpopular opinion:
<< Large-scale fractional-reserve banking is bad, especially if we want to defeat a central authority that can repay printing money in case of bankrupts.
Little-scale fractional-reserve banking is mostly neutral, nor bad nor good. >>
Now take the uncle Jim cashu mint as example: he runs a mint for ~50 people, he started with his close relatives and now other friends has started trusting him with their money to have a reliable cashu-based near-zero-fees "homebanking" service. They didnt give in his hands all their wealth, just some portions of it.
Some local stores in the city are now familiar with uncle jim mint and they "dont swap immediately the all the jim-sats after being paid"; they put some trust in Jim, they store some so they dont pay lightning fees for swappin, and instead they spend directly the jim minted sats in other stores.
This is a mental experiment for a small scale bank; in the city there are a lot of uncle jim and a lot of analogous situations, some bigger, some smaller, some trusty, some evidently recognized as scammy.
Why, in this case, Jim doing fractional reserve is neutral?
Because Jim is involved in the community, he has skin in the game, he has great advantage in being a good person. He will beaten and his family will be upset (and, theirself, at risk) if he start act malicious.
He can literally phone to most of his user in one day and just propose if its ok for them if he use some bitcoin to buy a new server, he will have the money after a month. There could be no problem with fractional reserve, is a neutral option.
Its one of the multiple ways Jim could act maliciously, but in a small scale it would easily catched; on a small scale it becomes pretty indistinguishible from a bankrun.
In conclusion, I think cashu wouldnt benefit much from solutions to give users "imperfect proofs of full reserve"; it will greatly benefit, instead, in a focus and optimizations of the protocol to make easier to have networks of little mints instead of remote-managed big ones.
In case the old Jim will fool me I will keep for myself his robot lawnmower he lent me, thats no problem.
calle 👁️⚡👁️ (nprofile…82wz) what do you think?