42 views
in Cryptocurrency by (16.6k points)
How does the concept of "Proof of Reserve" aim to improve transparency and trust in Bitcoin exchanges?

Please log in or register to answer this question.

1 Answer

0 votes
by (16.6k points)

Proof of Reserve is a concept that aims to increase transparency and trust in Bitcoin exchanges by verifying that the exchange holds enough Bitcoin to cover all customer deposits. This is done by regularly publishing cryptographic proof that the exchange controls the amount of Bitcoin it claims to have. By providing this proof, exchanges can demonstrate that they are not operating on a fractional reserve basis,_

...