Bitcoin as a reserve currency In my opinion, there is a fairly good reason for the existence of banks that store their own reserves in bitcoins and issue their own digital currency, backed up and subject to exchange for bitcoins. The Bitcoin network cannot scale to such an extent that every financial transaction in the world is broadcast to all participants and included in the blockchain. You need a second level that performs the tasks of the payment system, which will be easier and more efficient. It is also impossible to ignore the question of the time required to confirm a bitcoin transaction. In the future, making medium-sized and even large purchases in this way will simply be impractical. These problems will be solved by banks and currencies backed by bitcoins. They can work in the same way as traditional banks did before the currency was nationalized. Different banks may adopt different strategies: some may be more aggressive, while others may be more conservative. Some of them will use a partial reservation system, while others can be provided with 100% bitcoins. The differences can be expressed in terms of interest rates and the availability of discounts on certain financial services. According to George Selgin, who has carefully worked out the theory of competitive free banking, it follows that "such a system will be stable, self-regulating and resistant to inflation." I believe that the result of the formation of bitcoin will be Its right to be called " influential money”, serving as a reserve currency for banks that issue their own digital money. Most bitcoin transactions will be made between banks to calculate net transfers. Transactions with bitcoins between individuals will be as extraordinary as purchases using bitcoin today. - Hal Finney, post () on the forum [bitcointalk.org](http://bitcointalk.org) , December 30, 2010