Users can generate a time-stamped report in the exchange’s backend to view the address of their cold storage wallet, from where balances can be verified. The hot wallet address isn’t displayed as a security precaution. This shouldn’t impact the overall conclusions from such a report, as only 5-6% of funds are kept in the hot wallet.
The feature aims to go further than the recent audits on exchanges like Bitstamp and Kraken. The audits were a one-time shot, conducted by individuals. Vault of Satoshi’s tool is technically available around the clock for any user to generate a daily report.
Should such tools become more commonplace, the next step will perhaps be some dashboard with simplified indicators such as proof of solvency status and the like, tools which will be deemed as essential to the secure functioning of a decentralized currency system and which will separate reputable institutions from the rest.
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Adam Cochran, the exchange’s director of marketing, wrote:
“Users can self validate both their balance and the overall reserves of the exchange by navigating to our security center and selecting “BTC Proof of Solvency”. From there, load the partial tree list, select “online tools” and copy paste in the relevant information to validate the holdings.”
Following is a report generated today, April 22:
The creation of such an automated tool did involve significant effort but Cochran believes it was worthwhile. When it comes to transparency, their mantra is to “never settle for good enough”.
Reaction has been quite positive, with some Bitcoiners writing that this will help give them an edge over Canadian rival CAVirtex despite currently posting typically lower trading volume.