According to CZ, Binance will start proof-of-reserves to achieve complete transparency. One of the biggest exchanges in the world today is Binance. With its growth and development since its inception, it has displaced much older cryptocurrency companies. During the gloomy bear market, CZ’s Exchange was also among the most resilient.
CZ is an enthusiastic Twitter user who frequently shares news and other ideas. CZ recently mentioned Merkle-tree proof-of-reserves in one of his tweets. Additionally, he suggests that all cryptocurrency exchanges conduct the same kind of audit. CZ emphasized that cryptocurrency exchanges shouldn’t adopt the fractional reserve method used by banks.
All crypto exchanges should do merkle-tree proof-of-reserves.
— CZ ? Binance (@cz_binance) November 8, 2022
Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.
The CEO of Binance announced that the company would soon begin performing proof-of-reserves. This, he said, will also open the door for complete financial transparency. CZ’s tweet comes after the recent disclosure that Binance had fully acquired FTX.
One method or structure used to increase transaction verification transparency is the Merkle tree. Exchanges for cryptocurrencies must be transparent about the user funds they hold. Users can use the method to examine and confirm that the exchange holds the funds.
The Merkle tree is a special kind of data structure used in computer science. Merkle trees are used by Bitcoin and other cryptocurrencies more effectively and securely encrypt blockchain data.
In essence, this involves the exchange of data and giving the auditor the data. The auditor then creates the Merkle tree using the information from the user balances. After the calculation, the auditor verifies and publishes the Merkle tree and root hashes.
The Merkle tree leaves will be saved as a plain text file and made available to the public on GitHub. Customers will be able to personally check their balances thanks to this. The Merkle tree data structure is used by Gate.io, one of the top cryptocurrency exchanges with over 12 million users. For complete transparency, the exchange has most recently undergone a proof-of-reserves audit. CZ emphasized that the exchanges should adhere to this data auditing process to give their customers complete transparency.
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The post Binance To Use Proof-of-Reserves for Full Transparency appeared first on Latest Crypto News.
Binance To Use Proof-of-Reserves for Full Transparency was first posted on November 9, 2022 at 4:20 am.
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