I guess it is inevitable that some form of "reserve" banking will enter the cryptocurrency world. Already there are crypto credit cards. But isn't this opening the door for the way the world already got into so much trouble with debt? Seems safe enough in the way you are presenting it. But these things have a way of being a foot in the door.
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Debt for consumption is generally bad.
Debt for producing something of value is generally good.
That's what puts the "capital" in capitalism.
And in this case, it can enable many poor nations that have great wealth in natural resources to become players in the global economy.
I'm only an armchair expert, but this is not really banking... nor are there 'reserves', fractional or otherwise. In Stan's demo, there is no product at the outset. Lets assume an orcharding scheme - say, sandalwood.
There is no argument this is financial engineering, but its orders of magnitude simpler and less opaque and less contrived than that which overheated the US housing market. In answer to your question: ["isn't this opening the door..."] well, no. This scheme is nothing unusual, if the prospectus is exposed correctly. Objectively 'bad' ideas abound. This scheme is balanced on trust, less delicately than perhaps fractional reserve lending is. Certainly less punishing on the sandalwood harvester, than a traditional big-bank securitised loan, because:
Thank you. In the search of a more honest monetary system, this certainly has appeal. The crooks and malevolent schemers will always be with us and spend their days and nights misusing what intelligence they have to divert whatever system for their own aggrandizement to the detriment of the whole. Stan is coming from the right place. Thank you for your thoughtful comments.
No worries mate.
When is the first bitshares debit card out? Or will it remain a geeky thing no one can use?
Working on it in a few different formats.
Excellent :)