Amid much chatter about proof of crypto exchanges on Tuesday, Kraken CEO Jesse Powell shared a screenshot of coinmarketcap.com’s newly launched Proof of Reserve (POR) dashboard. Powell said he plans to be “more aggressive with addressing the issues” and stressed that the POR audit “requires cryptographic proof of customer balance and wallet control.”
Jesse Powell points out that “proof-of-reserve auditing requires cryptographic proof of customer balance and wallet control”
Kraken’s Jesse Powell had a lot to say about FTX’s recent collapse, as the head of the exchange recently said the trading platform’s collapse was a “massive failure.” Powell has also been talking about proof-of-resources (POR) lately, as Kraken has long been a member of Nic Carter’s proof-of-resources list, or “Wall of Fame.” Kraken is noted to be “Full POR” and is described as “auditor-backed, point-in-time user verification with a Merkle approach.”
Recently, cryptocurrency price aggregator website coinmarketcap.com (CMC) announced Proof of Reserve Dashboard Launch and Binance CEO Changpeng Zhao (CZ) he tweeted About the CMC POR dashboard. “@Coinmarketcap has released a new currency stock dashboard feature,” CZ said on November 22. That same day, Kraken CEO Jesse Powell tweeted about the new CMC feature.
“I said that I will be more ambitious by voicing the problems. This is one of them,” – Powell he said. “’Reserves’ = assets minus liabilities. ‘Reserves’ != a list of wallets,” explained Kraken executive Powell he added:
Proof of Reserves AUDIT requires cryptographic proof of client balances and wallet control. #A proof of reserves audit should have: 1. total customer liabilities (the auditor should exclude negative balances). 2. user-verified cryptographic proof that each account is included in the amount. 3. signatures proving that the guardian controls the wallets.
The paper shows that the full POR is easily obtainable, but will crypto bosses follow through on their Merkle-proof audit promises?
The POR issue comes at a time when the crypto community is on edge and exchanges have promised to share POR audits with Merkle proof. A handful of exchanges have shared their address lists, and analyst firm Nansen has also published a dashboard of exchange wallets. While Powell shared his thoughts on Twitter, he also shared an archive.org link to an article titled “Proofing Your Bitcoin Holdings.”
The article discusses how to obtain straight lists of accounts/balances, the Merkle approach to proving liabilities and “Proving Assets”. An “intuitive and simple solution” to “prove control of assets” is to sign a declaration of ownership with all relevant private keys, the article explains.
While the paper and Jesse Powell explained that the full POR can be easily achieved by proving the Merkle approach and possession of private keys, a number of exchange principals have promised to share not only cold and hot wallet addresses, but also audits based on the Merkle approach. . The only thing left is for the crypto community to remember such promises and hold exchange CEOs to them.
What do you think of Kraken’s Jesse Powell being more assertive on issues like proof of reserves? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Refusal: This article is for informational purposes only. This is not a direct offer or an offer to buy or sell or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or use of any content, goods or services mentioned in this article. .