Bryan and Miko talk about how banking makes no sense and how Bitcoin might impact the global financial system.
Myth number one: Banks lend out depositors' money as loans. False. Banks lend against depositors money. Each new loan actually creates the money that is loaned with an entry in an electronic ledger.
Myth number two: Banks have to keep 10% of each one dollar (Reserve Ratio) of deposits and this constrains how many loans the bank can make. Due to the reserve ratio, the amount of new money created by bank deposits can be calculated with the Money Multiplier.
No longer true. See the New York Fed's article on why reserve requirements are no longer binding
Myth number 3: national savings == national investment
Not really. In part because the Leverage Ratio is so large and because market forces actually decide where money is invested
Myth number 4: The U.S. dollar is backed by the gold in Fort Knox.
Not since 1971 when Nixon closed the Gold Window
Given that we have debunked these myths, we need to answer some glaring questions
Miko thinks not but this entirely depends on the trade relationship between the U.S. and China.
Many people in the Bitcoin community believe that Bitcoin will eventually supplant the U.S. dollar as the world's reserve currency. They think of Bitcoin as a better Gold Standard
How the banking system actually works defies our intuitions about it. Banking in our modern world really is fucking insane.