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Proof of Keys is a new movement that encourages all crypto users to withdraw their funds from centralized exchanges like Coinbase, Gemini and others.
Started by the investor Trace Mayer, the first Proof of Keys event will take place on January 3, 2019 – the anniversary of the bitcoin genesis block – with the goal of establishing an annual tradition.
To participate in the Proof of Keys movement, simply withdraw any encryption that you hold in an exchange and save it in an encrypted personal wallet where you control private keys instead.
Let's start a new one #Bitcoin cultural tradition.
An annual key-test celebration on January 3 to declare monetary sovereignty by withdrawing everything $ BTC held with trusted third parties to the software, we check the private keys and make the consent of the network.
Who is w / me? 💪 https://t.co/sJhOYSjStH pic.twitter.com/ve9DBsQhh9
– Trace Mayer [Jan/3➞₿🔑∎] (@TraceMayer) December 9, 2018
Why is proof of the keys important?
There are two main reasons for removing encryption from exchanges on the day Key Test:
- To ensure that cryptocurrency exchanges actually have the funds they claim. If everyone withdraws their encrypted funds on the same day, the crypto exchanges will be forced to pay. If they can not do it, it's a huge red flag for exchanges that claim to keep your money safely.
- To take control of your crypt. As Andreas Antonopoulos said: not your keys, not your bitcoins. If all your bitcoins are stored on a cryptographic exchange, you do not actually have private keys; the exchange does. This means that you do not have control of your bitcoin or other cryptocurrencies.
Protect against substandard and centralization
If you leave your funds on a cryptocurrency exchange, it is much more vulnerable to hacks. $ 1 billion in the crypt was stolen in 2018; the overwhelming majority of the crypted exchanges.
Exchanges are huge targets for hackers because they store large amounts of encryption in one place. Instead, move your crypt to a personal wallet where it is much less vulnerable.
As previously reported by Block Explorer, Coinbase holds at least 25% of all litecoin in circulation. It is a dangerously large amount of litecoin stored in one place. Not only that, but Coinbase technically possesses all that litecoin; not you the depositor.
Proof of Keys is therefore a practical and philosophical movement.
How to transfer your funds from an exchange
To withdraw funds, you will need a wallet and a corresponding address first.
The safest option is a hardware portfolio of Ledger, Trezor or KeepKey. These are similar to external hard drives designed specifically for crypt storage. Since they are offline most of the time, they are hard to hack (known as "cold storage").
There are other portfolio options that give you full control of your private keys including desktop software portfolios and plain paper wallets.
Do you want more information? 12 best bitcoin wallets for secure and secure encrypted storage
Once you have obtained the address of your portfolio, simply withdraw the funds from the exchange to the address of the portfolio.
Please note that a high transaction volume may occur on January 3, which could cause traffic congestion. You should also test the wallet address by first sending small amounts of crypto to the wallet.
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