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This shouldn't be surprising. The same sort of things would happen back in the good old days when we were on the gold standard.

Usually the catalyst in those days was some sort of financial stress at moment of weakness for the bank. In the 19th century, Typically this was in the fall before the receipts from the harvest came in. Small banks would have minimal reserves, and failures could easily cascade.

I'm surprised with all of the rhetoric about fiat money that nobody figured this out sooner.




> I'm surprised with all of the rhetoric about fiat money that nobody figured this out sooner.

My experience has been that goldbugs usually just don't want to be told about or think about this, so I'd expect things to be the same among Bitcoin supporters. And presumably a number of the clever boys will quietly reason that even if, later on, Bitcoin goes the way of all money, the people who were in on the ground floor will still have made their killing.


Apparently the gold market is still heavily fractionally reserved today, too.




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