Annual January 3rd Proof of Keys Celebration of the Genesis Block

[o_e_l_e_o]

LOANS are where the loan giver creates new units of account. (learn how bank loans and mortgages 'create money')

Fiat loans, yes. Bitcoin loans, no. There is an entire ecosystem of bitcoin loans. We have a lending board on this very forum. Bitcoin loans obviously exist. If I am running an exchange and have skimmed off half of all deposits for myself, there is nothing stopping me "loaning" those deposits back to the exchange to cover this proof of keys nonsense, and then taking back control of them the next day.

thats the whole point of proof of keys. to make an exchange insolvent if it cant honour real bitcoin withdrawals.

Which, I'll say again, will only work if everyone (or at least the vast majority of users) withdraw their coins, which will never happen.

For example, I run a scam exchange. My exchange has 100,000 BTC on the books, but is actually only keeping 10,000 BTC in reserve because the other 90,000 BTC is tied up in investments and my own personal wallet. Proof of keys day comes along - I have a full year of advance knowledge in which to prepare. I can withdraw some coins from various investments or use my own personal stash to "loan" money to my exchange to cover this day, and then take them straight back out again the next day. I know full well that only a tiny minority of users will actually test this system. My 10,000 BTC reserve will probably be enough, but I'll give my exchange another 10,000 BTC loan for a day just in case.

At no point did I ever say bitcoin is being created out of thin air or any other such nonsense you are claiming as you yet again derail this thread to talk about Lightning. Try to stay on topic.

[franky1]

i understand that "proof of keys" campaign will never get popular enough to have a 90% bank run..
that was not my or your debate..

we both agree that PoK is an uneventful insignificant impact. i showed a chart and you bracketted a 'will never happen' so that is not in contest/debate..

the debate was your mention of "if every person withdrew, the exchange can just loan for one day"

here ill quote myself quoting you saying this as YOUR!! scenario..

Even if every single person withdrew all their coin today (which will never happen), the exchange can just borrow bitcoin for the 24 hours needed

an exchange cannot just "borrow" bitcoin .. there is no magic mint that can raise 500k coins in one night.
only altcoins can.. again something you admitted to also
again ill quote myself quoting you

Obviously they are not creating them out of thin air, although in the case of exchanges like Binance, they can always just mint more of their fake wrapped/tokenized BTC, since apparently lots of people don't understand the difference.

..
if you were a scammy exchange owner with 100k btc deposits of customers. and you STOLE 90k. leaving only 10k for possible daily withdrawals.
if PoK event exceeded the 10k withdrawal amount.. you as a shady scammer are NOT LOANING ("borrowing") extra coins FROM YOURSELF!!(facepalm).. because you are you.
loans in the fiat world like credit cards and mortgages are not taking value from one source. they are MAKING value.
research how fiat 'money creation' works

edit to answer below:
seems oeleo is on a personal defence "i never said" ramble. totally missing the point of the scenario he did mention and my response to the scenario, he seems more interested in 'he never said' rather than discussing the scenario

so one last time the scenario was if EVERYONE did do a bank run on an exchange.. where value is not some small XXk  but massive XXXk request, the exchange cant get hold of massive amount of coin. especially because unlike real banks, that can just magic money into existence, you cant magic up value in bitcoin.

the fiat banking sector got bailed out through loans which were government backed printing of new money.
this money printing bail out loan is not a thing that happens in bitcoin.

a thief returning the funds he stole is not a 'loan' its a return of stolen assets, with a possibility to steal again a day later.
there is a difference

(im not going to continue his silly side track of 'i never said 500k'.. so lets just say "massive value of 100% bank run" to void debates about questing silly who said what amount debates)

point being if an exchange only left 10% and stole 90% (note avoidance of actual unit numbers) if a 100% bank run occured. an exchange wont 'just'(making it seem easy) loan itself 90% to fulfil withdrawals and then take back its loan a day later.

..
as for the silly argument about separeting the businesss entity from the human entity.. (facepalm)
if someone crashes a car into you and you are injured. you dont care about diagnosing the two physical bodies of the car vs its driver, as to who is responsible. its common sense to treat the owner of the car as the perpetrator and the emphasis is on the car owner being responsible.

a business brand name is not an AI robot that steals and spends money on its wife and kids.. its a business entity. not a human. the human steals and spends the money on personal lifestyle. the human has the brains and arms and legs. a brand name has no brain or arms or legs.. as a doctor you should know this..

take this weeks 'theranos medical blood test' scam, .. the 'theranos' logo(brand) is not on trial, you wil never see a logo act as a defendant.. however, the CEO is on trial. and SHE(human) just got slapped by the courts

in car accidents. you will never see the car drive into the defendant seat. nor its licence plate say an oath to speak the truth in court.. the driver will

[o_e_l_e_o]

an exchange cannot just "borrow" bitcoin .. there is no magic mint that can raise 500k coins in one night.

I never said anything about borrowing 500,000 BTC. It is completely reasonable to expect an exchange to be able to borrow 5 or 10,000 BTC to cover this proof of keys day, though. And again, I never said about this loan being "minted" from anywhere.

if you were a scammy exchange owner with 100k btc deposits of customers. and you STOLE 90k. leaving only 10k for possible daily withdrawals.
if PoK event exceeded the 10k withdrawal amount.. you as a shady scammer are NOT LOANING ("borrowing") extra coins FROM YOURSELF!!(facepalm).. because you are you.

You as an exchange owner and you as an individual are two entirely separate entities, just as your exchange's wallets and your own personal wallets should be two entirely separate entities. Getting the two things intertwined are how scams happen - see, for example, the Quadriga exchange.

research how fiat 'money creation' works

I am very aware of how fiat loans create money, and you can search for and read my previous posts on the topic if you wish. That has nothing to do with a bitcoin exchange borrowing bitcoin to cover their withdrawals for a day.

[Dadan]

Great reminder of bitcoiners. This is one of the core value created by bitcoin other than transaction mechanism that is simply revolutionary. This is to remind that you can save your money in your own safest place. No need bank or any institution to save your money with their rules. Not your keys; not your coins

[so98nn]

I respect this day as it has taught us what is our's and how you own it! (With the keys here).

However, I find it little off the track that how I will have to pay enormous fees to withdraw my hard earned BTC's (satoshi's basically), into my wallet and whenever I will need to sell them I will have to put them back on an exchanger with even more fees. Then they will have maker and taker fees thus messing up with my hard earn money.

I just wish it would have been very affordable on that side. Somehow they have given us the freedom in many sense for banking sector but the few steps are becoming the huddles these days.

Im not sure if Satoshi ever thought about this problem while he was working on it?
What if he just thought that it may not be used by at such great extent so there is no need to add that congestion block program to relieve the traffic and make it fee free. 

Just a thought over coffee. What he did is out of the box obviously.

[Danydee]

 It also seems that there's people that like to send gifts to the genesis block on this day  

No mode seriously, I can that there's transactions on other dates..  so whats the purpose behind sending coins to a place they can't move from?  looks more like burning !!

[witcher_sense]

Wishful thinking. Remember when HitBTC froze their customer's accounts and suspended all withdrawals a couple of days before this day back in 2019? https://www.ccn.com/bitcoin-exchange-hitbtc-freezes-customers-accounts-ahead-of-proof-of-keys-event/
What happened afterwards? Everyone realized they were being scammed, withdrew all the coins that they could, and then HitBTC went bankrupt? Lol no, they are the 3rd biggest exchange in the world in terms of volume.

HitBTC is one of the biggest fraudulent companies out there that has been scamming its customers for years and will likely continue its shady activities until  regulators, police, FBI, or whoever else, come, shut them down, and send the team behind this exchange to jail, which I doubt will ever happen though because their team is anonymous for "security reasons." If you have time, look through this excellent article that thoroughly explains why users should avoid HitBTC at all costs. The short version is:

1) According to Bitwise: "It is also easy to show that HitBTC volume is almost entirely fake. <...> hourly volumes are <...> completely detached from the reference set of exchanges, with most of the week’s volume happening between 4/29 and 4/30, suggesting that volume on HitBTC was not influenced by the same events that influenced every other real volume exchange. We believe HitBTC’s volume is predominantly wash trading, done in small trade sizes."
2) They don't conduct due diligence on assets they are listing, they delisted Bitconnect scam only when it exploded and thousands of people lost their money.
3) As I already mentioned above, their team is anonymous which makes it problematic to hold them accountable.
4) They don't require KYC but use it as an excuse to freeze accounts.
5) They are likely insolvent.
6) They are selectively scamming their clients, the process of how they usually conduct their crime is described in the article.

What happened afterwards? Everyone realized they were being scammed, withdrew all the coins that they could, and then HitBTC went bankrupt? Lol no

We wouldn't have fractional reserve banking if people were a bit smarter or, at least, less lazy when it comes to their own money.

[franky1]

Wishful thinking. Remember when HitBTC froze their customer's accounts and suspended all withdrawals a couple of days before this day back in 2019?

HitBTC is one of the biggest fraudulent companies out there that has been scamming its customers for years and will likely continue its shady activities until  regulators, police, FBI, or whoever else, come, shut them down, and send the team behind this exchange to jail
..
4) They don't require KYC but use it as an excuse to freeze accounts.

a regulated exchange will not freeze an account and refuse withdrawals on a whim. they cant. its illegal.

if they suspect something they have to allow, the transaction to continue, and report it in secret. and if an authority then sends a court order to freeze assets. then they can hold funds hostage.(by court order only)

an exchange under its own terms and conditions cannot steal users funds. they can only decline to offer features/services to users they suspect of breaking their own business rules, but must always offer a withdrawal/exit/refund of the value to take out of the service to then never be able to use the service again,

any exchange that is freezing funds and not allowing withdrawal, without stating a court order. is breaking the law themselves.

[o_e_l_e_o]

Im not sure if Satoshi ever thought about this problem while he was working on it?

This is not a problem with the protocol, but rather a problem with centralized exchanges. I can send you bitcoin for <200 sats, and you can send it back to me for the same price, for a combined total fee at current prices of around 20 cents. When exchanges like Binance are charging you >50,000 sats, which is around $25, for a single withdrawal, 99% of that money is going straight in to Binance's pocket. I am amazed that centralized exchanges have continued to charge such ridiculous fees for so long and so few people seem to care about just how much they are being ripped off.

so whats the purpose behind sending coins to a place they can't move from?  looks more like burning !!

There was a thread about this just a few days ago. I'll quote my response here:

Maybe as "thank you" or other tribute to Satoshi. Maybe for luck. Maybe just to they can they say they gifted some satoshis to Satoshi. Maybe as a symbolic sacrifice to pave the way for $100k.

-snip-

Incredible. And if people are happy to continue using such a scammy exchange, then what hope is there that proof of keys will ever be successful. You cannot rely on exchanges or other people. The only safe option is to hold your own keys and own coins at all times.

[Lizzylove1]

I don't think some exchanges went on scheduled maintenance this year as some have always done in the previous years. I hope people don't leave much of their funds on exchanges to avoid been retked in a worst case scenario.