Over the course of the past few weeks, the much-hyped ‘Proof of Keys’ movement has been able to garner immense global traction. Not only that, it is also interesting to note that the event directly coincides with the ‘10-year anniversary of Bitcoin’s genesis block’.
As many of our readers are probably well aware of by now, the ‘Proof of Keys’ campaign looks to encourage crypto holders storing their digital assets on third-party exchanges/wallets to transfer their funds to a local wallet— wherein the private seed keys associated with their digital assets remain with them at all times.
Lastly, since its inception, the campaign has been able to amass a large amount of support from community stakeholders as well as causal crypto enthusiasts across various social media platforms.
‘Educate Yourself’ Seems To Be The Mantra Behind This Event
It is quite obvious that when a third-party entity has complete possession of your crypto assets, you “really really have to trust them” to manage your hard earned savings in an ethical manner — because if they were to fall victim to a hacking scandal or decide to run-off with your holdings there would be very little you could do about it.
In this regard, ‘Proof of Keys’ aims to serve as a timely reminder for people that the original idea behind Bitcoin was to provide owners with complete financial sovereignty over their funds. Additionally, the event also looks to promote education regarding safeguarding one’s assets in the most effective manner possible (especially on local wallets that are attached to user controlled private keys).
More On The Matter
If enough people come together and participate in this event, this exercise can really serve to test out the stress that third-party exchanges can handle in relation to their overall ‘solvency capabilities’.
Also, as per a recent report released by The Block, more than 70% of the global trade volume advertised by major crypto trading platforms today is inflated through the use of techniques such as ‘wash trading’. Thus participating in the upcoming ‘Proof of Keys’ event can serve as a means of conducting an indirect audit of an exchange’s deposits and account books.
When trying to assess the effect of the ongoing Proof of Keys movement, it can be useful to take into account statistical data that is currently available on Coinmetrics. According to the website, the 7-day average Bitcoin exchange volume has “reduced by nearly 25%” over the course of the past fortnight. This directly points to the fact that this initiative has had a massive impact of daily altcoin trade volume. With that being said, it now remains to be seen what happens in the coming 24-48 hours when the event officially goes live.