• Proof of reserves (PoR) is a current hot topic in the crypto world, with criteria and rankings for adequate PoR beginning to emerge.
• Traditional audits are not enough to provide the assurance users seek from PoR, as they are done periodically while crypto trades around the clock.
• Digital Asset Research (DAR) provides information and vetting services to major firms in traditional finance and produces the FTSE Russell index in the crypto world.
The crypto world is in the midst of a revolution, with proof of reserves (PoR) gaining increasing attention as the industry looks to recover from the shock and losses of the current crypto winter. As more and more discussions are held and work is done, criteria and rankings for adequate PoR are beginning to be developed. This is a critical development for the crypto space, as PoR provides assurance to users that their funds are secure and have not been tampered with.
However, traditional auditors have been unable to provide the assurance users seek from PoR. Audits are done periodically, while crypto trades around the clock. Doug Schwenk, CEO of Digital Asset Research (DAR), has pointed out that in order to have adequate PoR, there would need to be a way to measure assets and liabilities in real-time. This is where DAR comes in, providing information and vetting services to major firms in traditional finance and producing the FTSE Russell index in the crypto world.
DAR is just one example of the intense development efforts being made to make PoR more effective. This is complemented by the need for good regulation and a culture of compliance. Companies such as DAR are providing the tools necessary to ensure that users can trust their funds are safe and secure. This is an important step towards a more secure crypto world.
At the same time, there is still a need to develop more technical solutions to make PoR as effective as possible. Blockchain technology is being utilized to create immutable records that guarantee the security of funds. This is being combined with advanced cryptography to ensure that funds are kept safe from hacking and malicious actors.
Overall, PoR is becoming more and more effective as development continues. However, it is important to remember that technology alone is not enough. Good conduct requires good regulation and a culture of compliance. Companies such as DAR are helping to provide the necessary tools, but ultimately users need to do their own due diligence to ensure their funds are safe. With proper regulation and the right tools, PoR can become a cornerstone of trust in the crypto world.