Banks Without Bankers?! This BITCOIN Report Will Blow Your Mind!

"The Arc protocol could provide the necessary infrastructure for a trustless free banking system of service providers to emerge removing agency from fundamental economic functions."

"Imagine a system where users dollar cost average into Bitcoin via Arc use Federated technology for custody use ecash as the private cash balance for everyday transactions on the back end all service providers are clearing balances between one another via the lightning Network fedy mins and Arc nodes could act as banking infrastructure and the lightning Network could act as the Clearing Houses amongst them as a hub and spoke model in some a financial system of decentralized community-owned and operated digital Bitcoin Banks"

"assuming this ecash system could be turned into a reality it would be pretty damn bullish for BTC that's just because this alternative Financial system would be a massive demand driver for BTC due to the ecash aspect"

"they then note that fedy Min networks are also resistant to politics because they are currently EX exempt from Financial regulations"

"the author estimates that there could be as many as 10 million of these digital Community Banks someday"

"cashew like fedy min cashew leverages privacy preserving ecash which is backed by Cold Hard BTC the difference though is that cashew is much more centralized and by much more centralized I mean that it runs on a single server"

"the trade-off is that the centralized nature of cashew makes it possible to keep track of all the ecash in circulation without compromising privacy"

"quote in theory Market participants converge upon a monetary standard in a perfect world there would only be one form of money"

"this ultimately depends on whether ecash can gain enough adoption so that it becomes viable for money markets to form"

"fedy mints technically have the ability to Mint more ecash than there is BTC backing it"

"what this means is that there could be one fedy minint network that's minting say 10x more ecash than the others are and its users are then claiming more BTC at other fedy mins"

"in the Free banking era Banks were able to issue currency at their own discretion in theory this currency was backed by their gold in practice it wasn't always"

"the author notes three competitors Brokers and Clearing Houses given this fact the author argues that it could be possible for similar participants to provide the same assurances in a Federated ecash system"

"proof of reserves doesn't tell you anything about a crypto exchange's liabilities AKA debts so for instance you could have an exchange that proves that it has $1 billion worth of BTC being held for its users who have $1 billion worth of BTC deposited there but the exchange could also be $2 billion in debt without users knowing that fact"

"with an e-cash system however it's not exactly possible to have liabilities in the classic sense because all of the ecash in circulation is backed by BTC sitting in a multisig wallet if you can show that the ecash is backed by this BTC then that's sufficient to trust that the ecash minted by edim is legit"

"cashew proof of liabilities protocol requires four voluntary actions in order to work"

"the periodic changing of ecash private Keys is meant to simulate a bank run on the fedy Min if the fedy Min is unable to change the private Keys it used to Mint the ecash then it's a sign that the ecash they've minted is not backed by the BTC they claim it to be"

"there's a risk that fedt networks will begin functioning as fractional reserve banks that is issuing more ecash than they have BTC for"

"the author focuses on a new protocol called Arc which can be understood as a mixer combined with an escape hatch that allows users to withdraw BTC in an emergency"

"the primary drawback of Arc is that it can only support up to 10.5 million BTC for technical reasons that are outside the scope of this video"