[notahacker]

You seemed to understand my second paragraph pretty well tbh.

Internet Austrians and Bitcoiners believe that what is used as money should be a commodity with highly constrained supply, hence full reserve requirements for the former and a unified ledger and no credit-creation mechanism for the latter. Free bankers (and some altcoiners, and the economic mainstream) believe that what is used as money should be a promise from a financial institution with a flexible supply based on credit creation (disagreeing with each other on whether it's best backstopped by convertibility to a [quasi]commodity or central bank reserves under stricter regulations)

Free banking fanatics' arguments that Australian free banking practices were fundamentally sound and systematic collapse happened only because the government saved some of the worst ones should be taken with the same pinch of salt as anarchists' claims that people are fundamentally non-violent with crime occuring mainly as a reaction to police brutality.

[eru]

Sure, it's good to be wary. Though even blaming any crises at the end of free banking episodes, still seems to leave a pretty good track record overall.

As an aside:

Reading about how free banking can automatically can adjust the amount of bank money created over eg a fixed amount of gold to keep nominal GDP stable even in the face of eg increased demands for holding money from the general population, made me much more sympathetic to bitcoin's fixed supply than I'd been before. Since some kind of inflation, price level or nGDP targeting seemed like a good idea for a currency regime, and I could only assume that bitcoin was bound to fail before.

Of course, the mechanism George Selgin describes don't necessarily have to work that way. But at least it's something that looks plausible.