Fractional reserver always bad. Layered solutions are NOT fractional reserve. They are actually the opposite. When sats are "reserved" in LN they are LOCKED UP for a time actually reducing monetary supply. You and the other guy here sound like you are spending time around shit coiners and absorbing fud at different rates. While things like Ecash require trust the do not inflate the total monetary supply. It is like you two don't have a clue what fractional reserve is. You should learn what fractional reserve is FIRST because neither of you seem to know.

The Survival Podcast | Helping you live a better life, if times get tough or even if they don't

TSP Rewind – The Federal Reserves Shell Game – Epi-215

Today’s episode was originally, Episode-218- The Federal Reserves Shell Game and originally aired on June 11th, 2009.

Operating a cashu or fedi mint with insufficient bitcoin backing isn't fractional reserve, it is theft. Fractional reserve lends out reserves, and those loans are assets held by the bank. Fractional reserve isn't technically theft because your account deposits are seen as loans to the bank.

I think if you read what I wrote again, we're saying nearly the exact same thing. Ecash mint printing more tokens to lend out deposits is exactly the fractional reserve possibility we're both describing. Sounds like you got triggered by my first sentence and stopped reading, because I totally agree with everything you wrote 😝

This is what I was trying to articulate. A mint can print more tokens into existence expanding the total amount of ecash that's supposed to be pegged to sats. Its only detectable if there's a deep enough bank run.

As mints compete with lower fees and more services, the incentives lead to lending out more ecash than available in the reserve. Yes, this is theft and will be aparent when people run off the mint all at once.

L2 will not scale to mass adoption, as the block size has a limit on the number of channels it can support. Scaling will require L3 such as ecash and the like for regular plebes. This is nothing more than a paper IOU. The game theory leads to fractional reserve minting, as custodians lower fees and offer more incentives to compete for customers. Watch what happens to the market when mint runs start snowballing.