Annual Proof of Keys January 3rd

[hatshepsut93]

I store a tiny amount of coins on an exchange for when I need to quickly tap into my BTC stash, simply because I don't want to wait for tx confirmations whenever I need to do it (and don't pay fees and don't launch my cold storage setup), and I will likely skip participating in this flash mob, because I don't see any reason to do so. I trust that my exchange is not embezzling user's funds, and if I'm wrong, I will only lose the amount I can easily afford to lose.

[1714142929]

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[1714142929]

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[mk4]

So if I'm understanding this properly, we are asking everyone to give even more money to exchanges on Jan 3? If everyone moved their funds out, let's say 10k people per exchange at just 10k satoshi withdrawal fees (and some are even more), do you realize that means we are giving the exchange FREE 1 BTC?

Only the rich will do it.

Lol what. I don't think exchanges even monetize the withdrawal fees. And if they actually did monetize withdrawal fees, it wouldn't even be a significant amount for them in the slightly. 1 BTC is pretty much almost nothing for your typical exchange.

[Lucius]

Lol what. I don't think exchanges even monetize the withdrawal fees. And if they actually did monetize withdrawal fees, it wouldn't even be a significant amount for them in the slightly. 1 BTC is pretty much almost nothing for your typical exchange.

Well, fees are their main source of income for them and can be divided into deposit, withdrawal and trading fees. In most crypto exchanges withdraw fee is 50 000 satoshis, and most of that coins stay in their pockets since actual blockchain fees (BTC) are at least 10 times less than that amount and they use bulk transactions. Users who are promoting yobit/cryptotalk pay 120 000 satoshis withdraw fee, so I would say fees are very important for them.

We can conclude that one of the reasons why users do not withdraw their coins more often from exchanges is because of fees. Imagine that you are trading and every day moving your coins from an exchange, 30x50 000 satoshis = 0.015 BTC or even more in case of some exchanges.

[bettercrypto]

Lol what. I don't think exchanges even monetize the withdrawal fees. And if they actually did monetize withdrawal fees, it wouldn't even be a significant amount for them in the slightly. 1 BTC is pretty much almost nothing for your typical exchange.

Well, fees are their main source of income for them and can be divided into deposit, withdrawal and trading fees. In most crypto exchanges withdraw fee is 50 000 satoshis, and most of that coins stay in their pockets since actual blockchain fees (BTC) are at least 10 times less than that amount and they use bulk transactions. Users who are promoting yobit/cryptotalk pay 120 000 satoshis withdraw fee, so I would say fees are very important for them.

We can conclude that one of the reasons why users do not withdraw their coins more often from exchanges is because of fees. Imagine that you are trading and every day moving your coins from an exchange, 30x50 000 satoshis = 0.015 BTC or even more in case of some exchanges.

If you are a day trader. Its absolutely a burden to your asset. Imagine, everytime you have an execution wether it is a buy or sell a coin, you withdraw. Probably, you are lose. That is why some of traders stock their coins at exchange. Even there is a chance that the exchange they stock will be intercepted by hacker.
Exchanges have a lot of fees and I think it is not worthful to join such an activity like OP talk about. I don't think it is worth profitable for using my time and efforts.

[mk4]

Well, fees are their main source of income for them and can be divided into deposit, withdrawal and trading fees. In most crypto exchanges withdraw fee is 50 000 satoshis, and most of that coins stay in their pockets since actual blockchain fees (BTC) are at least 10 times less than that amount and they use bulk transactions. Users who are promoting yobit/cryptotalk pay 120 000 satoshis withdraw fee, so I would say fees are very important for them.

It's definitely mostly trading fees though, probably more than 95%. And my guess is that the withdrawal fees are higher than it should be for user experience reasons- for the network fees, so transactions would be confirmed faster. And probably also to make people leave funds on exchanges(hence increasing the chances of them making trades maybe?).

We can conclude that one of the reasons why users do not withdraw their coins more often from exchanges is because of fees. Imagine that you are trading and every day moving your coins from an exchange, 30x50 000 satoshis = 0.015 BTC or even more in case of some exchanges.

That's a reasonable conclusion, but let's also not forget that some people aren't willing to write down 12-24 words on a piece of paper and take the security responsibility to themselves.

[Asmonist]

I think for now I'm not yet ready to take that proof of keys. I believe I'm still satisfied with my wallet. Being or having a third party to hold my bitcoin is somehow a great deal. Its quite interesting to try if what is really the best way to gain more.

[mk4]

Being or having a third party to hold my bitcoin is somehow a great deal.

Unless you're leaving your funds with a lending platform or unless you actively trade, how is it a "great deal" though? You literally gain nothing besides convenience for leaving funds on a third party. You might think it's great, well, until that third party gets hacked.

[Lucius]

That's a reasonable conclusion, but let's also not forget that some people aren't willing to write down 12-24 words on a piece of paper and take the security responsibility to themselves.

People are not ready to be their own bank, and even if they wanted to, most are not capable of it. To be perfectly honest, a good portion of those who buy/sell or just store crypto have big problems with the basics of IT, and the importance of private keys for them is something like science fiction. All this is the result of a long-standing system that promotes as little of one's own responsibility and the transfer of that responsibility to others, of course, with a price or a violation of privacy.

If you open a bank account, all you need to access your funds is a plastic card (ATM) and a PIN, or your ID if you need something in the bank. If we compare this type of service with the usage of cryptocurrency it is evident why a large number of users continue to use crypto exchanges as normal banks. Many live in the belief that this is the same type of service, which is partially true - until the exchange is hacked, or the owner takes all the private keys to the grave.

[dragonvslinux]

I'm supporting this effort (officially), I don't think the sentiment/intent will change much or cause exchanges to fail due to lack of widespread support etc etc. It's clearly about educating newer investors into cryptocurrency about owning their own assets and the dangers of allowing a third party to own it. I know it took a hile for me to learn to begin with when there was already so much to learn about Bitcoin that appeared more important (or more interesting), so it's likely some people learn will learn about this around this time and it will help them about one day. It's irrelevant that my Bitcoin remains owned by me, not just on January 3rd.

[Icygreen]

I'm supporting this effort (officially), I don't think the sentiment/intent will change much or cause exchanges to fail due to lack of widespread support etc etc. It's clearly about educating newer investors into cryptocurrency about owning their own assets and the dangers of allowing a third party to own it. I know it took a hile for me to learn to begin with when there was already so much to learn about Bitcoin that appeared more important (or more interesting), so it's likely some people learn will learn about this around this time and it will help them about one day. It's irrelevant that my Bitcoin remains owned by me, not just on January 3rd.

Education is exactly what this is about. Yes, you nailed it.
Bitcoin proposes a challenging conscientiousness shift to traditional finance and personal responsibility in holding your own asset (especially digital) is a new concept that requires exercise to feel comfortable with.

[Gamblerwhale]

So how can we check how many does this?

[Icygreen]

So how can we check how many does this?

You can't but why do you think it should be relevant?

Exchanges aren't banks, no one should be using them as such, it's dumb that coins would be on an exchange and not on in your wallet if you're not trading.

It's not dumb. Plenty of people have simply not yet learned how to hold coins in their own wallet simply because banks are all they have ever known. So to the average person who keeps hearing about this Bitcoin thing and wants to invest a little, Coinbase looks like a bank, can you blame them?  Proof of keys will challenge that concept.

[franky1]

This event makes absolutely no sense. The only funds you should be storing with a third party or custodial wallet are funds which are actively being traded. If you are not actively trading, then why are you storing your bitcoin on an exchange or with a third party? And if you are going to go to the effort of setting up your own wallet and transferring your bitcoin out on January 3rd, why on Earth would you then transfer this bitcoin back to the third party on January 4th? If you are truly concerned that the third party you are using is not solvent, then by the time you try to withdraw on January 3rd along with hundreds or thousands of other users, then you may already be too late. Furthermore, companies know this is coming so could quite easily sell other assets to cover the date, whilst still not holding enough bitcoin the other 364 days of the year.

The whole thing is just backwards. If you want "proof of keys", then hold the keys yourself. Any other solution is incomplete.

thats the whole point of the event..

its like independance day.. most people kinda know about independance but each year there is a default big event as a classical reminder.
it saves all the drama of having to remind people all the time. and gets more people aware that may not have been aware before. then after the event more people think more carefully about how to hold it.

its like other events. you should respect your mother all year but have a big reminder event called mothers day. many family renew-refresh their respect for thir parents on father/mothers day. yea some slip up and be disrespectful other times of the year but they kind of remember again on the event. which reduces bad experiences the rest of the year compared to never having such an event

its like a training day. a masterclass. a significant event that can be talked about and learned from the rest of the year because of its significance at the event.

without such, many fools will have just trusted custodians all the time and thought it was never a problem. this way they can learn

[DooMAD]

its like a training day. a masterclass. a significant event that can be talked about and learned from the rest of the year because of its significance at the event.

without such, many fools will have just trusted custodians all the time and thought it was never a problem. this way they can learn

What's being questioned is whether it actually achieves that, though.  Some people are presenting this Proof of Keys event as "keep all your coins on an exchange for 364 days a year and just withdraw them on this one particular day to make sure the exchange is still solvent".  No one is learning anything if they're only doing that.  They need to keep the bulk of their stash in their own personal wallet and only have what they're actively trading on the exchange.

[Icygreen]

its like a training day. a masterclass. a significant event that can be talked about and learned from the rest of the year because of its significance at the event.

without such, many fools will have just trusted custodians all the time and thought it was never a problem. this way they can learn

What's being questioned is whether it actually achieves that, though.  Some people are presenting this Proof of Keys event as "keep all your coins on an exchange for 364 days a year and just withdraw them on this one particular day to make sure the exchange is still solvent".  No one is learning anything if they're only doing that.  They need to keep the bulk of their stash in their own personal wallet and only have what they're actively trading on the exchange.

The entire point of this event is to see if we can achieve this. Ultimately we are talking about adoption and best/safe practices, no?  I'd argue that proof of keys is a positive effort that does more for adoption than doing nothing or worse, making nonsensical arguments that its designed for the single purpose of keeping exchanges solvent. Don't get me wrong, keeping honest exchanges honest is great right?

keep all your coins on an exchange for 364 days a year and just withdraw them on this one particular day to make sure the exchange is still solvent[/i]".  No one is learning anything if they're only doing that.

I simply don't see anyone taking time to learn how to hold their own BTC in their own wallet with their own keys, with the understanding that its superior to being held in exchanges simply to transfer it back the next day.
Traders will be the only ones to do this right?
Sorry, IMO anyone with that convoluted argument is doing it to hear themselves talk or in an effort to protect their interest in an exchange.

[dragonvslinux]

Happy Proof of Keys day everyone! Don't forget to take ownership of your Bitcoin today 

[MarioV]

I consider the single days of abstention to something, one-off per year, totally useless. To have real effects one should always behave like this, in every field, to be consistent. Relatively to the crypto world, we urgently need true and pure DEX!!!

[Icygreen]

I consider the single days of abstention to something, one-off per year, totally useless. To have real effects one should always behave like this, in every field, to be consistent. Relatively to the crypto world, we URGENTLY need true and pure DEX!!!

Canadians are leading the way with non-custodial solutions. Only great things to say about https://bullbitcoin.com/
Take note, we need more like this!

[mk4]

That's a reasonable conclusion, but let's also not forget that some people aren't willing to write down 12-24 words on a piece of paper and take the security responsibility to themselves.

People are not ready to be their own bank, and even if they wanted to, most are not capable of it. To be perfectly honest, a good portion of those who buy/sell or just store crypto have big problems with the basics of IT, and the importance of private keys for them is something like science fiction. All this is the result of a long-standing system that promotes as little of one's own responsibility and the transfer of that responsibility to others, of course, with a price or a violation of privacy.

*snip*

I completely agree, hence I think we should try our best to educate the masses, especially the younger demographic. And yes, A LOT of people will learn basic internet/computer security in the hard way, a.k.a. the "Darwinian" way(by getting their funds stolen). This is why I tend to think that unfortunately, it looks like decentralized cryptocurrencies like bitcoin will be for the millennial generation and onwards; as the percentage of computer-illiterate baby boomers and GenX-ers are just too much.

[DooMAD]

"keep all your coins on an exchange for 364 days a year and just withdraw them on this one particular day to make sure the exchange is still solvent".  No one is learning anything if they're only doing that.

I simply don't see anyone taking time to learn how to hold their own BTC in their own wallet with their own keys, with the understanding that its superior to being held in exchanges simply to transfer it back the next day.
Traders will be the only ones to do this right?
Sorry, IMO anyone with that convoluted argument is doing it to hear themselves talk or in an effort to protect their interest in an exchange.

I don't see how it's a "convoluted argument".  Look at the way in which the event is reported in certain parts of the media (bold emphasis mine):

Those taking part in the event will withdraw all their cryptocurrency holdings on exchange platforms before January 3rd and keep it in a wallet for which they themselves hold the private key. Any open-source, non-custodial wallet will work. The important thing is that the user transfers the funds to a wallet for which they hold the private key and that they remain there for the duration of the day. By doing so, those taking part will protect themselves from the attack vectors above and will be using cryptocurrency like Bitcoin in its intended way. Additionally, if enough people join in on the Proof of Keys event, they will also be testing the solvency of cryptocurrency exchange platforms themselves.

"For the duration of the day".  And then presumably go back to business as usual and forget about it for another year.  I mean, I don't see any other way to interpret that.  

In my view, I think they could be doing a much better job of explaining exactly what they mean on the https://www.proofofkeys.com/ homepage, because the intended message is clearly getting lost somewhere along the way.  I'm not saying it's a misguided effort on their part, but it should be abundantly clear that checking for exchange insolvency is a secondary objective and not the main purpose of the event.