Glossary · deep dive

Proof of reserves

Evidence published by a custodian that it actually holds the coins it owes its customers.

Proof of reserves is a custodian showing that it controls coins matching what it owes customers, often by signing with its addresses or publishing a Merkle tree of balances.

Limits

  • It shows assets at one moment, not liabilities that may be hidden.
  • Coins can be borrowed for the snapshot.

The Bitcoin answer

The only proof that cannot fail is holding your own keys. Your balance on your own node needs no auditor.