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How Traditional Savings Works
You give money to a centralized entity who promises you a fixed rate of return.
They look for a higher guaranteed rate usually provided by their government.
They take YOUR money out of your account and invest that money elsewhere for a higher return than what they promised you. If everything goes well, you go on thinking your money is in your account (it's not), and the bank, if necessary, can quickly send you funds from other accounts if you need to withdraw. Typically, there will be withdrawal penalties if you do this too much. This is to keep you from withdrawing your money.
If everything doesn't go well, your bank will use your money to invest in higher risk, and sometimes that risk doesn't pan out and we have a crisis. Usually their government is there to bail them out, so no harm no foul...except you notice that everything has now become more expensive. This is because the government can only bail out these institutions with printed money, and the more money you print the more the price of things go up.
Much has been made recently about a public crypto figure who took users' money to invest in other projects. What he did was wrong. There's no excuse for that in our industry. But honestly, it's what the banks do every day.