Bitcoin is retrograde money masquerading has high-tech innovation. It’s a self-driving horse and buggy, going where the horse-breeder wants it to go. Everything about Bitcoin can be found in the dustbin of economic history— mining, full-reserving, limited creation. These are features of the money of the past, money that existed only because something better — credit-backed money — had not yet been invented. But every time credit has replaced some arbitrary standard, great leaps forward have happened. Yes, there have been failures, but that’s because when polities fail, their money fails. Corrupting the money may be how bad governments fail, but bad governments corrupt the currency, not vice versa.

Fractional reserve banking rivals the Gutenberg Bible in its seminal importance to economic progress. But that’s because it’s just credit-backed banking. The “fractional reserve” part is pretty much irrelevant. What we’re really talking about is “capital-constrained” banking, the checking account as a negotiable demand loan issued by a bank against its own credit. The “reserve” is just there to redeem the reserves, which is why, in many countries, the reserve requirement is zero for banks with access to a central source of reserves. The essence of banking is lending the bank’s credit, not accepting deposits. That’s why there are “non-bank” banks. Zero-reserve banking is not banking; it is money management. And we already have that service in the fiat world.