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Transcript
00:00If you deposit $1,000 inside of your bank account right now here in the U.S., your bank can legally
00:06lend on up to 90% of your deposit's value. So let's say someone else comes along and decides
00:12to take out a loan for $900 worth to buy themselves an avocado because inflation in the future is
00:17transitory. So they take out $900 and they deposit it back into the same bank to keep the money.
00:22That same bank can now lend 90% of that deposit's value or $810. And this goes on indefinitely until
00:32this deposit is reduced to pennies. This means with just one simple tweet, if you could hypothetically
00:39undermine the confidence and trust of an entire bank and you got enough people to withdraw all
00:44of their money all at once, that bank would collapse and it would need to get bailed out. That's the
00:50mechanism we're seeing fail in crypto right now.
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