"Oh my God, I have to apologize for not being able to explain it clearly. Iger waved his hand, "Let's start over, I'm going to use a game to explain the feasibility and merits of my plan, you know the Iron Vault." ”

"Of course. ”

"How does it work?"

"Gather the surplus money of the residents of Braavos and lend it to those who need it. Tyrion came back to his senses and added, "But unlike you, it's run by the ruler of Braavos, not by the individual. ”

"Yes, but let's talk about the difference at the end, and for now, let's role-play and see how it works. Egg put away the two certificates on the table, took out a silver coin, and placed it on the table in front of Tyrion: "I am an ordinary citizen of Braavos, and you represent the Iron Vault, and now, several wealthy residents of our city have deposited ten thousand gold dragons with you. ”

The dwarf looked at the silver coin in front of him, which symbolized the ten thousand gold dragons, and the disapproval expression on his face relaxed, he was an easy-going person, but what he recognized would not be easily changed, and he would never support anyone to commit fraud, even a recognized friend. Because of this, he was more curious about how Iger was going to convince himself.

＊＊＊

Egger's tone became serious: "I'm an ordinary Braavosian, and I'm planning to open a shop. After preliminary calculations, I thought I would need about 10,000 gold dragons, but I didn't have the money...... So, I ran to you and borrowed 10,000 gold dragons. ”

Egg picked up the silver coin he had just placed in front of Tyrion, put it back on his side, and the game began.

"Then, I used the 10,000 gold dragon to rent a shop, buy tools, and open a shop. Iger put the silver coin on the side of the table where no one was sitting, to show that he had used up the ten thousand gold dragons: "The first round of the game is over, so far, everything is well understood, I owe you ten thousand gold dragons, and you owe you the people who deposited with you - referred to as depositors ten thousand gold dragons." Next, something interesting happened. ”

"Huh?" Tyrion stared at Egger as he put aside the silver coin he had spent and brought it back to him, "What does that mean?"

"That's the biggest difference between Braavos and the people of Westeros, where people don't hide their surplus money at home, but put it in iron vaults. It is this small change that is crucial in the game of money. Egger couldn't help but smile and felt that he had a good idea: "After I spent this ten thousand gold dragons, the person who earned my ten thousand gold dragons handed over the money to you again." ”

"Huh......" Tyrion seemed to realize something, but still didn't know what was going on.

"Then, there was a problem with my business plan, and I found out that although I opened the store, I haven't bought the raw materials yet, and I still need 10,000 gold dragons, so I asked you to borrow it again. ”

"But you haven't paid off your last money yet. ”

"That's right, but if you don't lend me, I'll just declare bankruptcy and let you take half of my store. Iger grinned and said, "But I rented the storefront, and the things in my store are useless to the iron vault, which means that if you want me to pay back, you can only continue to lend me money, hoping that my store can be opened and make money." ”

"Isn't that a scoundrel?"

"No, it's not a scoundrel, it's the reason Braavos is the strongest and richest of all the free city-states!" Egger raised his voice, and took the silver coin back to his side, and put it in the corner of the table where no one was around, "I used the ten thousand gold dragons I borrowed from you again to open the shop and open it." Do you understand what's going on?"

"You turned this '10,000 Golden Dragon' upside down and turned it into a store that costs 20,000 Golden Dragons?"

"That's right, with 10,000 gold dragons, I opened a store that can only be opened with 20,000 gold dragons, and you will be able to recover the principal and interest formed by the 20,000 gold dragon loan in the future, and the rich people who deposit in your place will eventually earn the interest of 20,000 gold deposits, and all three parties will be happy!" Egg asked Tyrion rhetorically. "But how did this happen? Where did the extra 10,000 golden dragons come from?"

The dwarf thought for a while before he replied carefully, "It's because I took a risk, and when I still owe someone else's money, I lent someone else's money to you who haven't paid off the last loan!" Tyrion quickly remembered the problem that he hadn't solved before, "This extra 10,000 gold dragons that don't exist are actually the embodiment of the risk I had!"

"That's right, but back to your previous question, what if when you lent me the 10,000 gold dragons, the people who deposited the money with you, which we call depositors, suddenly want to withdraw the money?"

"The Iron Vault can't only have 10,000 gold dragons. ”

"That's true. Egg pulled out another handful of silver coins and placed them in front of Tyrion: "You have a lot of money in your vault, so if anyone wants to take 10,000 gold dragons, you can give him 10,000 gold dragons." But now the question is, not a single piece of money in your coffers is your own, so what if all the depositors ask for money at the same time?"

Tyrion remembered the conversation between the two of them, but now the questioner was Egger, who was sitting across from him, "This can't happen, because that's exactly what the Iron Vault is trying to avoid." ”

"How can this be prevented? ”

How did it turn into Egger and answer it himself? Tyrion finds himself in the loop, realizing that the other party has made himself play the Iron Vault in order to think about it. However, he has always prided himself on being smart and likes mind games, so he decided to take on the challenge.

After a few seconds of thinking, he had an answer: "Interest and trust, interest makes 'depositors' willing to deposit, and trust in the strength of the iron vault makes 'depositors' never worry that they will not be able to withdraw money when they want to, so unless they really want to use it, no one will withdraw money just out of worry." ”

"That's great, but now there's a question, what if the store I open doesn't make money?"

The dwarf's eyebrows were furled, and after a long while, he burst out like a curse and replied word by word: "Then I won't lend you money!" I will send an employee to confirm before I release the loan, and if my employee thinks that your store will be difficult to open profitably, then I will not borrow a copper plate. ”

Tyrion's answer was even more accurate than Egger's answer, and it was not a shame that one of the smartest people in Westeros was able to understand the need for risk assessment before lending money so quickly. But that's fine: "Well, now we can conclude that what we can do with 10,000 gold dragons and 20,000 gold dragons is because through a series of operations that seem complicated but are actually very simple, we have virtualized 10,000 gold dragons that do not exist." And I do this because you believe that my store will make money, and your savers will trust that you will always be able to pay off their savings with interest. ”

......

"The non-existent 10,000 gold dragon is not so much the embodiment of the risk you are taking, but the embodiment of the 'trust' between the iron vault, the depositor and the lender. It is this trust and confidence in the future that has allowed the people of Braavos to build a huge fleet and beautiful city far beyond their own financial capacity with limited money, becoming the youngest but richest and most powerful of the nine free trade city-states. Other trading city-states later imitated the establishment of banks, but because they could not emulate the culture of the Braavosians who were accustomed to depositing money in iron vaults, they were completely powerless to compete with iron vaults in terms of the amount of money. ”

Tyrion was overwhelmed by Egger's new vocabulary and never-before-heard rules, and for the first time he felt that his brain was not enough, and after thinking about it for a while, he admitted that he couldn't figure out the problem.

But Iger didn't give up, he decided to go all out: "Do you think our game is over?"

"Not yet?" the dwarf looked up and looked at his adventurer friend for a few seconds, and suddenly realized, "Seven gods, you...... Do you want to continue borrowing!?"

——