Binance To Start Proof Of Reserves For Full Transparency – CZ
In latest developments, Binance CEO CZ, has recommended that all crypto exchanges should do merkle-tree proof-of-reserves. He further suggested that crypto exchanges should not run on fractional reserves, unlike banks.
CZ reassured his 7.3 million Twitter followers that Binance would also start proof-of-reserves for full transparency in order to avoid future doubts and concerns about the reserve balance.
All crypto exchanges should do merkle-tree proof-of-reserves.
Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.— CZ 🔶 BNB (@cz_binance) November 8, 2022
This comes after CZ announced later today, that Binance would be acquiring its rival FTX to safeguard the liquidity crunch it’s facing due to the mass withdrawal of funds.
What is a Merkle-tree?
A Merkle tree, commonly referred to as a Hash tree, is a type of data structure used for data synchronization and verification. It is a tree data structure where each non-leaf node is a hash of its child nodes. It maintains data integrity and uses hash functions for this purpose.
Merkle-tree Applications:
Merkle trees are useful in distributed systems where the same data should exist in multiple places. It can be used to check inconsistencies. And therefore, Merkle-trees find their profound use in bitcoin and blockchain as well.
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