Bitcoin exchanges/banks …

[N12]

… offering short selling and paying Bitcoin depositors a bit of interest.

Are there any? Thoughts?

[evoorhees]

You can short with Bitcoinica, right?  Why not do that with no interest paid?

[N12]

I believe so, but I’d like to deposit Bitcoins for that purpose over a longer term. Do they lend from their own reserves? Otherwise they must be fractional reserve.

[evoorhees]

It works on margin, not fractional reserve. So you have to deposit something, and then you get 5:1 leverage off that position.