Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7000469630297202688
FTX #Next #Dominoes #Falling: #Bitcoin #tumbles to fresh 15K lows and #Grayscale #trust #discount worsens as #Genesis hints #bankruptcy: https://lnkd.in/eymJJ_7U : #Bitcoin #Funds?: World’s #Largest #Bitcoin #Fund #Grayscale Won’t #Disclose #Proof of #Reserve As Shares trade At 45% #Discount to #Bitcoin : https://lnkd.in/e6jnhANY : #Grayscale Won’t Confirm On-#Chain #Wallet #Information Publicly: https://lnkd.in/eyJSdWHj :
Grayscale, the #asset #manager running the world’s largest bitcoin fund, said that it won’t be sharing its #proof of #reserves with #customers. “Due to #security concerns, we do not make such on-chain #wallet information and confirmation data publicly available through a #cryptographic #ProofOfReserve, or other advanced #cryptographic #accounting procedure.”
Why Above #NonDisclosure is #Critical for #Bitcoin #Valuation
#ProofOfReserves #PoR: Can #reserve #audits avoid another #FTX-like #Default? https://lnkd.in/eq-S7Cer
#Crypto #exchanges are actively releasing #PoR #audits in order to build #transparency but it would take more than that to regain #investor #trust. In wake of the #FTX #collapse from now-#bankrupt #cryptocurrency #exchange funneling user funds to mitigate its own #risks, crypto exchanges came up with a #transparency #solution called proof-of-reserves.
A practice, recently endorsed by #Binance CEO, offers a way for exchanges to offer #transparency to users in absence of clear regulations. Proof of reserves (PoR) is an #independent #audit conducted by a #thirdparty to ensure that a #custodian holds the #assets it claims to own on behalf of its clients. This auditor takes an #anonymized #snapshot of all #balances held and aggregates them into a #MerkleTree.
IN-DEPTH: LATEST ON #MerkleTree: https://lnkd.in/erdiTTrB
A #Merkle is a #cryptographic #commitment #scheme in which each “leaf,” or #node, is labeled with a #data #block’s #cryptographic #hash. Their chief use to is to #verify #data that has been handled, sent or stored between computers as they have found extensive use in #blockchain #P2P #networks. After taking the snapshot, the auditor obtains a #Merkle #root: a #cryptographic #fingerprint that uniquely identifies the #combination of these #balances at the time when the snapshot was created.
The #auditor then collects #digital #signatures produced by the #crypto #exchange, which prove ownership over the #onchain #addresses with #publicly #verifiable #balances. Lastly, the auditor compares and verifies that these balances exceed or match the client balances represented in the Merkle tree so that the client assets are held on a full-reserve basis.
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