The post Proof of Reserves: Show Me the Money, Or It Didn’t Happen appeared on BitcoinEthereumNews.com.

If we claim to be an improvement on traditional finance, we had better start playing the part. It’s clear how Bitcoin fixes rampant monetary discretion. It’s clear, too, how Bitcoin changes your relationship with money—both financially because you’re more inclined to save an appreciating asset—as well as physically because you can do novel things like hold the GDP of a small island nation on a USB. There is one thing, however, that is slowly gaining acceptance and needs to be accepted if we are to truly improve on the mistakes of the past, and that’s Proof of Reserves. Bitcoin has unique audit properties baked into the system itself. Bitcoin allows any third party to audit the entire money supply down to the smallest unit. A third party can do this for free, without any special privileges or permissions. It’s difficult to overestimate how novel and consequential this property of the Bitcoin protocol is and the implications of the guarantees it provides. For context, the total global supply of dollars is an estimate and not an exact number by any stretch of the imagination due to a variety of factors including the existence of physical and digital cash, as well as currency circulation abroad. The total number of gold in existence is also an estimate due to entirely different reasons mainly the lack of certainty when it comes to the volume of mined gold from different mines around the world, gold existing in private hands, gold hoards and stashes, new mining, recycling, and unreported sources. There is no global, trustless, source of truth for any money or commodity other than Bitcoin. And this should be Bitcoin’s driving force moving forward. Proof of Reserves (PoR) has been an important part of the industry since near-inception. The infamous Mt. Gox collapse of 2014…

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Filed under: News - @ September 26, 2024 4:23 pm