Notable crypto enthusiast Trace Mayer has been recently advocating the importance of a “Proof of Keys” celebration. The event will take place on January 3, 2019.
Proof of Keys event
Trace Mayer is now promoting a crypto ownership awareness event called “Proof of Keys“. In the event, cryptocurrency holders are urged to remove their crypto assets from exchanges and other third parties in an effort to prove solvency.
The idea is that if the exchanges actually hold customers’ crypto assets (which they claim to store for customers after deposit), then all customers should essentially be able to remove their assets from those third parties at any point. Mayer described the details and reasoning on his website.
“By demanding and taking possession of their assets, individuals will learn real fast with blockchain proof whether they are part of the elite HODLers or not. Proof of Keys is the annual HODLer initiation.”
Popular crypto YouTuber Crypt0 recently interviewed Mayer, talking largely about the Proof of Keys event.
Mayer mentioned several points of importance for the event. He described that crypto holders should know how to store and protect their crypto private keys, and effectively transfer them into their own possession at will.
Mayer also stated the issue of third-party solvency for crypto assets. After a year of solvency doubt regarding Tether (USDT) and others, Mayer urged the crypto community to use this event to find out which crypto exchanges (and other third parties) can prove they have the funds they claim to store. “This is a fight over your monetary sovereignty,” Mayer said.
Many exchange hacks and casualties have occurred since bitcoin’s inception, showing the importance of skepticism, as well as the personal storage of investor private keys.
“People kind of need to understand the importance of proof of keys and proof of work. And so why not do it on the genesis block day [January 3]. Why not turn this into an annual celebration that we can do as a community, and just demand proof of the keys.”
The event encourages anyone who holds crypto assets on exchanges, gambling websites, or other third parties, to withdraw all those assets to private individual storage. “You can always send them back, but just prove that they’ve got them,” Mayer said.
Additionally, Mayer explained this event to help test the blockchain network consensus as well. Withdrawing assets, in theory, would prove the validity of different asset chains.
Doubts against the event
There could be a potential problem with this event, however. Exchanges like Binance for example, do not hold all customer assets on the exchange at one point. They store an amount of those funds in cold storage, to protect customers.
If everyone wanted to withdraw all funds in a short period of time, it would likely create significant traffic while waiting for the exchange to transfer those funds and then allow customers to withdraw them.
Back when 1Broker was shut down by the FBI a few months ago, Crypto traders flocked to 1Broker’s sister-site 1Fox exchange to withdraw all their bitcoin in fear of a related shutdown. This caused hours of delays in asset withdrawls.
Actively trading crypto assets can also often require an amount of funds to remain on exchanges. This event in theory could basically make trading inoperable until all the transfers were sorted out and sent back.
Who is Trace Mayer?
According to his own website, Trace Mayer is “an entrepreneur, investor, journalist, monetary scientist and ardent defender of the freedom of speech,” with degrees in law and accounting.
Back in October 2017, Mayer Tweeted a price speculation for 2018, seeing bitcoin priced around $27,000 by February. This prediction was made while bitcoin was priced near the $4,400 range, via coinmarketcap.com data.
Considering the exuberant run in the months following that tweet, Mayer was not terribly far off. He did however make a few projections in later months that were not accurate. One such scenario saw bitcoin reaching more than $100,000 by the end of 2018.
Current #Bitcoin run very similar to Jan-Mar 2013 run ($7->$266->$90; $700-$20k->$9k) with backlogged new accounts, etc. then Silk Road catalyst (salable supply shock) for $100->$1,200. Mountain of #WallStreet money lining up. What are potential 2018 $BTC scenarios? @ToneVays? 😎 pic.twitter.com/PqrinsGSFz
— Trace Mayer [Jan/3➞₿🔑∎] (@TraceMayer) January 17, 2018
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