Bitcoin wallet provider BitGo has announced the launch of its ‘Verified by BitGo’ proof-of-solvency tool, allowing the public to validate the solvency of supported businesses.
The demand for ways to assure solvency was heightened following the MtGox disaster, which left hundreds of thousands of bitcoins unaccounted for to this day. Users of the exchange continued to pour in money, all the while its negative balance sheet was unknown to them (and for a period, perhaps even the exchange operators themselves).
Since then, proof-of-solvency was more commonly carried out as an occasional exercise, good for only the time it was performed. A small number of services and exchanges have claimed the incorporation of a continuous feature, but this hasn’t become widespread among major players.
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In the old methodology, proof-of-solvency trials were cumbersome and occasionally invasive. BitGo’s tool aims to give the public a real-time view into the assets held by an enterprise, verify that they exceed total liabilities, and ensure that their holdings are included in these liabilities.
Bitcoin tipping solution ChangeTip was the first to adopt BitGo’s new tool. ChangeTip CEO Nick Sullivan commented, “Building trust is critical to expanding our user base within the bitcoin community and beyond, and using BitGo to demonstrate our Proof of Reserves goes a long way to achieving it.”
The tool complements BitGo’s multisignature wallet service, adopted by many large players in the industry and which has yet to be compromised by theft or hacking.