I think the issue today though is that so often that is not what happens. That small bakery or small business owner can’t get a loan, even though that’s how it’s “supposed to work”, because the big banks much rather lend to corporate giants that can pledge big chunks of collateral. Again, I have nothing against lending as long as losses aren’t socialised. If a given bank wants to lend at a fixed rate, they (along w depositors) should also take the fall if it doesn’t work out—not the public. But as a depositor, ask yourself if you’d be willing to put your money in a fallible bank for a mere 3% interest and risk losing everything (no FDIC insurance, no bailouts). The only reason I think the answer is yes today is because it’s a rule of thumb that banks are bailed by government. If the answer is no, the current banking model would have to change under BTC. I believe it will be a bottoms-up change.