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The coins themselves can be tracked on the blockchain, but once they're deposited on an exchange, the coins join a general pool and accounting external to the b
by v64 8y ago
The coins themselves can be tracked on the blockchain, but once they're deposited on an exchange, the coins join a general pool and accounting external to the blockchain (such as what account on the exchange was credited for a coin's deposit, whether or not the coins were sold, and what amount of cash was withdrawn) becomes relevant.
- roywiggins 8y agoHowever, it's totally possible for an exchange to periodically prove, or at least persuasively demonstrate, how much money they have, by proving they have the private keys for wallets worth a certain amount. Proving they don't have more obligations is harder, obviously, but you can prove you haven't lost all your deposits if you want.
- v64 8y agoFor those interested, here's an example of such a Proof of Liabilities implementation [1] with previous HN discussion [2]. [1] https://github.com/olalonde/proof-of-liabilities https://github.com/olalonde/proof-of-liabilities [2] https://news.ycombinator.com/item?id=7277865 https://news.ycombinator.com/item?id=7277865