Proof Of Keys

Proof of Keys is an initiative that encourages cryptocurrency holders to withdraw their funds from exchanges and store them in personal wallets, typically on January 3rd each year. This practice promotes awareness of the importance of self-custody and the principle that "not your keys, not your coins." By participating in Proof of Keys, users can verify that the exchanges where they store their assets actually hold the claimed reserves and are not engaging in fractional reserve practices, where more funds are promised to users than are actually held. This initiative aims to strengthen the security and integrity of the cryptocurrency ecosystem by reminding users of the need to control their private keys.

The Proof of Keys movement underscores the risks associated with leaving cryptocurrencies on exchanges. Exchanges, while convenient for trading, are centralized entities that can be vulnerable to hacking, mismanagement, or even fraud. By withdrawing their funds and taking control of their private keys, users reduce their exposure to these risks and ensure that they retain full ownership and control over their digital assets. This is especially important in the context of exchange failures, where users who do not hold their own keys may lose their funds if the exchange becomes insolvent or is compromised.