Fractional Reserve in Bitcoin to the Max
World Crypto Network
Fractional reserve banking—where institutions issue more claims than physical reserves—increases money supply and misaligns price signals, causing malinvestment. In Bitcoin, fractional reserve occurs only through custodial services: self-custody (holding private keys) guarantees 1 BTC = 1 BTC with no reserve risk, while exchanges like Mt. Gox demonstrated insolvency when withdrawals exceeded reser

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