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> There's a 1:1 backing of crypto funds Well, this isn't difficult to prove. Do they have a public process to display that 1:1 backing? Google is failing me,

> There's a 1:1 backing of crypto funds Well, this isn't difficult to prove. Do they have a public process to display that 1:1 backing? Google is failing me, I can't find anything but this: https://blog.coinbase.com/a-behind-the-scenes-look-at-the-biggest-and-quietest-crypto-transfer-on-record-682ff4a6d9e4 https://blog.coinbase.com/a-behind-the-scenes-look-at-the-bi...

throwaway192874 6y ago
For individuals this isn't hard, but for large institutions it's very non-trivial. There's a reason that none of the major exchanges do this, it's not just incompetence or lack of desire. Coinbase, and various other exchanges are regulated in the US so they undergo regular audits where having to prove funds is part of it. Some exchanges, I think it was Kraken, has published some version of those results, but the problem with these is at that point you're saying you trust the auditor and the process, which is another thing people would complain about anyways. Technically, it's also very nontrivial to prove ownership of millions of addresses when they are also constantly changing (due to new address generation). Proving ownership of addresses stored in cold storage is even more involved, and would actually put the funds at risk because you would need to us bring the key out of cold storage to do so. Furthermore, people would likely not be satisfied with a one-time proof, so you need to operationalize this and do it on some regular basis. Lastly, while this would be nice to have, it's frankly not something I expect any major exchange to do because it's simply not worth the investment. Most customers don't care and are happy to trust the government and regulations to ensure they are good enough. While I understand people are concerned because of what happened with MtGox, that doesn't mean that every other company after is involved in some big conspiracy about lying how much crypto they have. It's just FUD/conspiratorial thinking without real evidence to back it up. The exchange going down at key moments (read: when the app is seeing peak traffic at new milestones regularly) is basically expected for a young fast growing SV startup, and doesn't support the argument that they are nefarious things going on

throwaway192874 6y ago

For individuals this isn't hard, but for large institutions it's very non-trivial. There's a reason that none of the major exchanges do this, it's not just incompetence or lack of desire. Coinbase, and various other exchanges are regulated in the US so they undergo regular audits where having to prove funds is part of it. Some exchanges, I think it was Kraken, has published some version of those results, but the problem with these is at that point you're saying you trust the auditor and the process, which is another thing people would complain about anyways. Technically, it's also very nontrivial to prove ownership of millions of addresses when they are also constantly changing (due to new address generation). Proving ownership of addresses stored in cold storage is even more involved, and would actually put the funds at risk because you would need to us bring the key out of cold storage to do so. Furthermore, people would likely not be satisfied with a one-time proof, so you need to operationalize this and do it on some regular basis. Lastly, while this would be nice to have, it's frankly not something I expect any major exchange to do because it's simply not worth the investment. Most customers don't care and are happy to trust the government and regulations to ensure they are good enough. While I understand people are concerned because of what happened with MtGox, that doesn't mean that every other company after is involved in some big conspiracy about lying how much crypto they have. It's just FUD/conspiratorial thinking without real evidence to back it up. The exchange going down at key moments (read: when the app is seeing peak traffic at new milestones regularly) is basically expected for a young fast growing SV startup, and doesn't support the argument that they are nefarious things going on