Comment Re:Gox used margin trading & fractional reserv (Score 1) 143
How does fractional reserve work with Bitcoin? If they loan out some deposited coins, fair enough, but if the original owner draws on it they cryptographically need that exact coin, not some other random one.
Or do depositors hand over the coins to the exchange for a virtual account, destroying the signed-ownership benefit of Bitcoin and replacing it with trust in an institution?