Topic: This seem like the only solution for cex now (Read 104 times)
Centralized exchanges like Binance, KuCoin and Okex aren't fully secured at all. So their proof of reserve can't make users more satisfied because there still a chance to be a fake proof of reserve. I think non custodial wallets are the only solution to make a safe place of users crypto funds.
It is a new trick to attract investors’ money, as without the presence of a supervisory authority that verifies well and accurately all financial statements and the presence of companies that make money from the detection of this corruption, transparency and control, no central platform can prove that it has enough cash to face crises. It will be hostage to the decisions of the big whales who, knowing the company's net assets, can influence the price or cause it to go bankrupt.
Proof of Reserve, Proof of Liquidity, or whatever nonsense they end up inventing shouldn't change the fact that people are using exchanges in the wrong way. Their use case is self-explanatory, just look at the name - exchange. If you insist on using a CEX then deposit to it, perform your exchange, and withdraw your coins from it and into a well-known non-custodial wallet. It's that simple and yet people fail to do it.
These platforms that have started providing "proof" are vultures taking advantage of the current situation and looking to eat up as much as they can while the streets are still filled with meat and blood. They have seen a chance to increase their customer base with those left unsatisfied by other centralized platforms and now they are showing off.
These platforms that have started providing "proof" are vultures taking advantage of the current situation and looking to eat up as much as they can while the streets are still filled with meat and blood. They have seen a chance to increase their customer base with those left unsatisfied by other centralized platforms and now they are showing off.
What is the meaning of proof of reserve? I have not read so much about it but but I was thinking that exchanges uses it to proof indirectly or maybe directly that if they are hacked, they can still be able to recompensate those that are affected? Or is it just a means to only just show the total amount of money the exchange has? I thought it is the total amount an exchange has in cold wallet?
Point of exchanges providing proof of reserve is to show that they didn't play with client's money (like SBF did) and that they have it in their custody. Audit is done via 3rd party to ensure that what they are claiming is actually true. As I said in my previous post, that can be manipulated as well so it shouldn't be used as an argument for storing your crypto on an exchange that provided that. 
Of course it's a huge positive thing. But that doesn't mean we should totally trust exchanges now. Hacks and fraud are still a thing. As always, if you absolutely need to use a centralized exchange, always immediately withdraw after every buy; or if you're actively trading, don't deposit majority of your funds on a single exchange.
What is the meaning of proof of reserve? I have not read so much about it but but I was thinking that exchanges uses it to proof indirectly or maybe directly that if they are hacked, they can still be able to recompensate those that are affected? Or is it just a means to only just show the total amount of money the exchange has? I thought it is the total amount an exchange has in cold wallet? 
Of course it's a huge positive thing. But that doesn't mean we should totally trust exchanges now. Hacks and fraud are still a thing. As always, if you absolutely need to use a centralized exchange, always immediately withdraw after every buy; or if you're actively trading, don't deposit majority of your funds on a single exchange.
Proof of reserve do not eliminate that exchanges do not make you to fully control your asset that you have with them (the exchange), it is not even your coins and tokens on blockchain, it belongs to the exchanges, on blockchain. So it does not eliminate the account freezing, and deposit and withdrawal maintenance. It does not eliminate many inconveniences that you can experience on centralized exchanges.
Although, I think it can help people that are trading to rely better on those exchanges, but not fully rely on the exchanges.
But never leave your coins on exchanges, if you do not trade again for sometime, or if you have coins you are not using to trade, transfer them all from the exchange to a noncustodial wallet.
Rikafip is very correct, what you can absolutely rely on is noncustodial wallet (but multisig, cold storage or combined), just because it is trustless, it is your own, you can fully control it.
Although, I think it can help people that are trading to rely better on those exchanges, but not fully rely on the exchanges.
But never leave your coins on exchanges, if you do not trade again for sometime, or if you have coins you are not using to trade, transfer them all from the exchange to a noncustodial wallet.
Rikafip is very correct, what you can absolutely rely on is noncustodial wallet (but multisig, cold storage or combined), just because it is trustless, it is your own, you can fully control it.
now publishing their proof of reserves, what do you think about this idea?
Will this work at all or will fail over time? Drop your 💡.
Will this work at all or will fail over time? Drop your 💡.
It's a great advertising in order to keep people's trust in CEXs, not much else.
But really, it's not that difficult to do business by handing over private keys to this or that entity, do some crap and, although the CEX shows healthy proof of reserves, those could belong, by contract, to somebody else.
Also, of course, by doing this they can make their addresses targets for hackers - and I don't mean the bitcoin network here.
So yes, it can easily fail. Take all the public info with a grain of salt and trust no one but yourself.
While its probably better to show Proof-Of-Reserve than not, I don't think that is the reason to trust exchanges more than before. These things can still be manipulated (and most likely will be) and after everything that happened lately you have to be crazy to trust CEX, no matter the evidence they show.
The only way to be sure that your crypto (read bitcoin) is safe is if its in your own non-custodial wallet.
The only way to be sure that your crypto (read bitcoin) is safe is if its in your own non-custodial wallet.
Trust on centralised exchanges without any proof won't work anymore, which is why Proof-Of- Reserves is making lot of sense, Crypto dot com came up with this idea some time ago and a lot of people are talking boooh about this idea, now it looks like the only solution available.
Over-leveraging ruined FTX and this always happens in the back, now Binance, OKEX and Crypto.com are now publishing their proof of reserves, what do you think about this idea?
Will this work at all or will fail over time? Drop your 💡.
Over-leveraging ruined FTX and this always happens in the back, now Binance, OKEX and Crypto.com are now publishing their proof of reserves, what do you think about this idea?
Will this work at all or will fail over time? Drop your 💡.
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