Bitcoin is based on monetary sovereignty and transparency. As new crypto institutions emerge and the industry keeps growing, adopting standards to maintain Bitcoin auditability and transparency becomes more critical.
Proof of Reserves is one of those standards. It allows users to confirm that the service or platform they are using, appropriately accounts for their assets.
Just recently, Ledn completed its third round of Proof of Reserves since they first launched the service in January 2021, pushing the crypto industry towards greater stability and legitimacy.
Why are Proof of Reserves Important to You?
Transparency is the first answer that comes to mind. Bitcoin companies should be as transparent as Bitcoin - with Proof of Reserves, users can anonymously verify that their assets are being correctly and accurately accounted for.
"Transparency is one of our core values at Ledn. This is why we invest in solutions like Proof of Reserves to provide periodic reports to clients so that they have peace of mind that Ledn can meet its financial obligations," said Mauricio Di Bartolomeo, co-founder & CSO at Ledn.
At Ledn, a Proof of Reserves attestation is a process whereby an independent public accountant reviews Ledn's client asset balances, its lending, and custodial balances at a point in time to ensure that the company is appropriately accounting for those assets.
Is the Process Anonymous?
In short, yes. Ledn provides anonymized client hashed IDs in the place of personal client information. This allows Armanino, the third-party accounting firm, to produce individually verifiable proofs for each Ledn account balance without ever having access to any sensitive personal information, thereby protecting client confidentiality.
Armanino provides their attestation following AICPA standards and presents their attestation to clients in the form of a Merkle tree. This cryptographic structure allows for the efficient and convenient proof that a subset of data is included in an overall set - in this case, the assets and liabilities covering each individual's account balance.
As Simple As Five Easy Steps
Simplicity is one of the advantages of the process. That is why, if you are a Ledn client, you can verify how your assets are being accounted for in five simple steps:
If you had a balance on January 31st, 2022, at 11:59 PM EST, your balance was automatically and anonymously included in our recent Proof of Reserves attestation and you can verify it following these instructions:
- Log into your account and find the Proof of Reserves section on your home dashboard.
- Copy your Hashed client ID.
- Next, go to Armanino's external website.
- Click on "Check My Balance"
- Paste the Hashed client ID.
And that's it, five easy steps that generate peace of mind and help with the transparency the industry needs.
Ledn provides financial products with a mission to help clients across the globe unlock the power of digital assets to build wealth for the long term. With registered clients from over 127 countries, Ledn offers savings accounts and Bitcoin-backed loans, enabling clients to access dollars or additional Bitcoin without needing to sell any of their existing holdings.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.