So much about the claim of cryptos being limited supply...
https://seekingalpha.com/article/4082979-many-bitcoins-lost-forever
" while the number of bitcoins in existence will never exceed 21 million, the money supply of bitcoins can exceed 21 million due to fractional-reserve banking."
"Martin YK Li, Contributor explains:
"Fractional reserve banking is when banks loan out or invest with money that customers have deposited, while keeping just a fraction of that money in reserve (actually sitting in the bank vaults) in case of a bank run. This form of banking increases the money supply by a factor of x, where x is the money multiplier (http://bit.ly/2tPc0Ys).
Let's look at a small microcosm of the economy, for example, a society that consists only of you, me, and the bank. For the sake of example, let's say there are only $100 that exist in our small little society, and you own all $100. You decide to give the money to the bank for safekeeping, which doesn't change the amount of money in the system; There's still only $100. However, the bank decides to let me borrow $50 of that $100. Now I have $50 to spend, and you still have $100 sitting in the bank, so there is now effectively $150 in the money supply.
The actual number of Bitcoins in existence is capped at 21 million, but with fractional reserve banking, banks or exchanges can loan out Bitcoins the same way they would loan out money. It's as simple as a large bitcoin exchange lending out 10,000 bitcoins to an individual to start a business. The money supply would thus increase by 10,000 and we would instantly have fractional reserve banking. Fractional reserve banking was actually already implemented by CoinLenders.com, which is unfortunately now defunct. Seeing that the government does not regulate Bitcoin fractional reserve banking however, most consumers are wary of banking with exchanges that utilize fractional reserve banking, and most exchanges are aware of this sentiment as well. Poloniex for example makes it clear on its front page that it doesn't operate under fractional reserve banking."
https://seekingalpha.com/article/4082979-many-bitcoins-lost-forever
" while the number of bitcoins in existence will never exceed 21 million, the money supply of bitcoins can exceed 21 million due to fractional-reserve banking."
"Martin YK Li, Contributor explains:
"Fractional reserve banking is when banks loan out or invest with money that customers have deposited, while keeping just a fraction of that money in reserve (actually sitting in the bank vaults) in case of a bank run. This form of banking increases the money supply by a factor of x, where x is the money multiplier (http://bit.ly/2tPc0Ys).
Let's look at a small microcosm of the economy, for example, a society that consists only of you, me, and the bank. For the sake of example, let's say there are only $100 that exist in our small little society, and you own all $100. You decide to give the money to the bank for safekeeping, which doesn't change the amount of money in the system; There's still only $100. However, the bank decides to let me borrow $50 of that $100. Now I have $50 to spend, and you still have $100 sitting in the bank, so there is now effectively $150 in the money supply.
The actual number of Bitcoins in existence is capped at 21 million, but with fractional reserve banking, banks or exchanges can loan out Bitcoins the same way they would loan out money. It's as simple as a large bitcoin exchange lending out 10,000 bitcoins to an individual to start a business. The money supply would thus increase by 10,000 and we would instantly have fractional reserve banking. Fractional reserve banking was actually already implemented by CoinLenders.com, which is unfortunately now defunct. Seeing that the government does not regulate Bitcoin fractional reserve banking however, most consumers are wary of banking with exchanges that utilize fractional reserve banking, and most exchanges are aware of this sentiment as well. Poloniex for example makes it clear on its front page that it doesn't operate under fractional reserve banking."
