Proof of ownership or proof of reserve for individuals/companies

[straumat]

Hi everyone,

I have an idea and I wanted to ask you if it makes sense… it’s a bit like a proof of ownership or proof of reserve for individuals/companies.

My vision is that “simply” owning Bitcoin will “soon” be an advantage and you will be able to obtain things without having to spend them. As an example, in France, when you apply for a loan to invest in a house, crypto-assets are not taken into account in your wealth… To help bitcoin owners getting advantage of their assets ownership, I was thinking of creating a platform where a user could declare its bitcoin address, the platform challenges the user to verify its claim and edit a certificate that could be “trusted” by third parties like banks.

This platform would allow any bitcoin users to “prove” to anyone that he actually owns some bitcoin. Of course, I know you can ask anyone to sign messages with keys and all but it’s not easy to understand/do for someone who is not into Bitcoin (especially banks).

Please, feel free to tell me my idea is stupid but try to explain to me why.

[un_rank]

This platform would allow any bitcoin users to “prove” to anyone that he actually owns some bitcoin. Of course, I know you can ask anyone to sign messages with keys and all but it’s not easy to understand/do for someone who is not into Bitcoin (especially banks).

They could do a bit of research and educate themselves. Understanding how to sign/verify a message is not hardwork, is totally free, and the key here is verify, instead of trusting what another party says.

I was thinking of creating a platform where a user could declare its bitcoin address, the platform challenges the user to verify its claim and edit a certificate that could be “trusted” by third parties like banks.

Will editing a certificate involve a process other than a signed message? How do you plan to verify who an address belongs to?

- Jay -

[straumat]

Understanding how to sign/verify a message is not hardwork, I agree with you but for a bank employee or a landlord, I don't think they can/want to learn it and they don't want to loose time.

I don't know yet how I will do with the certificate, for sure, it would make a third party be sure that one or several bitcoin addresses are linked to an email adress (as it's easy to verify an email adresse)

[avikz]

Hi everyone,

I have an idea and I wanted to ask you if it makes sense… it’s a bit like a proof of ownership or proof of reserve for individuals/companies.

My vision is that “simply” owning Bitcoin will “soon” be an advantage and you will be able to obtain things without having to spend them. As an example, in France, when you apply for a loan to invest in a house, crypto-assets are not taken into account in your wealth… To help bitcoin owners getting advantage of their assets ownership, I was thinking of creating a platform where a user could declare its bitcoin address, the platform challenges the user to verify its claim and edit a certificate that could be “trusted” by third parties like banks.

This platform would allow any bitcoin users to “prove” to anyone that he actually owns some bitcoin. Of course, I know you can ask anyone to sign messages with keys and all but it’s not easy to understand/do for someone who is not into Bitcoin (especially banks).

Please, feel free to tell me my idea is stupid but try to explain to me why.

Proof of reserve or ownership is fine! But the major roadblock you are going to face here is the legitimacy of Bitcoin as an asset. Unless that specific country doesn't see Bitcoin as a legal tender, no banks will consider Bitcoin as a part of your net worth. That is just one scenario and I am sure there will be more.

Your vision is nice. But unless a legal framework is provided by the country, I don't see any reason for it to get considered by the registered financial organisations.

[straumat]

Thanks. Indeed you are right. Maybe the target are more "humble target" like landlords or something like that.

[franky1]

if a business decides to accept bitcoin as payment or collateral for a loan, then they will have access to a wallet(which can verify messages).. so they will know enough about bitcoin to participate by just using most wallets..so not really a problem that needs solving

your not really reinventing the wheel you are just trying to pretend vehicles never had wheels or that people cant understand that vehicles come with wheels.. when they clearly have/do without a problem

[tranthidung]

I have an idea and I wanted to ask you if it makes sense… it’s a bit like a proof of ownership or proof of reserve for individuals/companies.

To help bitcoin owners getting advantage of their assets ownership, I was thinking of creating a platform where a user could declare its bitcoin address, the platform challenges the user to verify its claim and edit a certificate that could be “trusted” by third parties like banks.

Proving ownership of an address will need a Bitcoin private key, to sign a message. It's possible to do with a non custodial wallet that gives the user private keys but do you think what will be next steps?

Proving ownership is one step but the actual owner, with private key in hands, can use it to broadcast a transaction and move bitcoin in that wallet (includes that address) to another (other) address(es). This first step is not enough to prevent scam in a trade if there is no Escrow service is used between to sides of a trade.

Your "certificate" means nothing to help a trader partner of that person with bitcoin in a wallet (address) you give the certificate to.

Secure trading by using an Escrow Service.

[legiteum]

Proof of reserve or ownership is fine! But the major roadblock you are going to face here is the legitimacy of Bitcoin as an asset. Unless that specific country doesn't see Bitcoin as a legal tender, no banks will consider Bitcoin as a part of your net worth. That is just one scenario and I am sure there will be more.

Your vision is nice. But unless a legal framework is provided by the country, I don't see any reason for it to get considered by the registered financial organisations.

Can you give us an example of a country where banks (or the tax authority) would not be consider Bitcoin as an asset? That's definitely not the case here in the USA, and as far as I know it's the same almost anywhere.

The term "legal tender" is wildly misused among Bitcoin hardcores, as most people assume it just means "legal". Bitcoin is legal in almost every country in the world, and there are relatively few restrictions on it in most countries.

"Legal tender" is where a government forces people to accept Bitcoin as payment whether they want to or not, and is actually evil in the context of Bitcoin. You really shouldn't use that term unless you know what it means.

[Upgrade00]

if a business decides to accept bitcoin as payment or collateral for a loan, then they will have access to a wallet(which can verify messages).. so they will know enough about bitcoin to participate by just using most wallets..so not really a problem that needs solving

Correct. If they plan to somehow recover those bitcoins should you default on the loan, they will need to have basic knowledge of how Bitcoin works.
Anyone who will trust a third-party who tells them Mr. Joe is worth xxx amount of dollars in Bitcoin is not doing very shrewd business.

[straumat]

if a business decides to accept bitcoin as payment or collateral for a loan, then they will have access to a wallet(which can verify messages).. so they will know enough about bitcoin to participate by just using most wallets..so not really a problem that needs solving

If you read carefully what I wrote, i'm not speaking of payment or collateral. In both cases, indeed, you need to transfert your bitcoin. I'm speaking of proving your weatlh to someone

[straumat]

Proving ownership is one step but the actual owner, with private key in hands, can use it to broadcast a transaction and move bitcoin in that wallet (includes that address) to another (other) address(es). This first step is not enough to prevent scam in a trade if there is no Escrow service is used between to sides of a trade.

I'm only speaking of proving your wealth. Like when you prove you have stocks or bank account, you can transfer the money right away

[straumat]

Can you give us an example of a country where banks (or the tax authority) would not be consider Bitcoin as an asset? That's definitely not the case here in the USA, and as far as I know it's the same almost anywhere.

I don't say it's illegal, i just say that in france, I haven't seen yet an institution consider your bitcoin as assets of your wealth; THey know it exists, they just don't handle it, you can check any bank form here

[franky1]

if a business decides to accept bitcoin as payment or collateral for a loan, then they will have access to a wallet(which can verify messages).. so they will know enough about bitcoin to participate by just using most wallets..so not really a problem that needs solving

If you read carefully what I wrote, i'm not speaking of payment or collateral. In both cases, indeed, you need to transfert your bitcoin. I'm speaking of proving your weatlh to someone

read what im saying.. if someones even engaging in a conversation with someone that wants to prove their wealth, the listener whom wants to know would only be interested in such conversation if they had a basic awareness/involvement/interest in bitcoin. thus able to easily get a wallet to check

you want to invent a scheme they need to download something else/new
when anyone can just download something that already exists that does the job
heck theres even scripts you can run on the web without a download

short story is.. you want to "create a platform".. when theres already things that exist

[Despairo]

It doesn't looks good, pretty much like a honeypot.

There are no guarantees that the site is secure and who're "people" who have access to the data, if everyone can access it, this would raise a chance to get robbed. Someone with obvious names will easily being targeted, the criminals only need to know who're the name, face and location, then they search how much coins they have.

If you can't use Bitcoin to apply for a loan in France, it just that France didn't accept Bitcoin as a collateral, as simple as that.

[legiteum]

Can you give us an example of a country where banks (or the tax authority) would not be consider Bitcoin as an asset? That's definitely not the case here in the USA, and as far as I know it's the same almost anywhere.

I don't say it's illegal, i just say that in france, I haven't seen yet an institution consider your bitcoin as assets of your wealth; THey know it exists, they just don't handle it, you can check any bank form here

Here in the US it's considered like any other security, like a stock or an ETF for purposes of a loan or collateral.

Bitcoin is a highly volatile asset, so that is taken under consideration.

[davis196]

To help bitcoin owners getting advantage of their assets ownership, I was thinking of creating a platform where a user could declare its bitcoin address, the platform challenges the user to verify its claim and edit a certificate that could be “trusted” by third parties like banks.

How do you think the BTC users will get advantage of their ownership? Using BTC as a collateral to get a loan or something? I don't think that any lender is going to give them a loan without getting the BTC as a collateral. A proof of ownership(without sending the BTC to the lender) won't work.
Having a public list of proven BTC owners would become a problem, if some criminals/mobsters find out that the people on the list have Bitcoins. Maybe this list of proven and verified BTC owners should be kept secret. Or maybe we don't even need such list. Keeping your BTC wealth a secret is the best thing to do.

[straumat]

Thanks a lot everyone for your help.

[LoyceV]

when you apply for a loan to invest in a house, crypto-assets are not taken into account in your wealth…
~
This platform would allow any bitcoin users to “prove” to anyone that he actually owns some bitcoin.

And the day day after your loan is approved, you lose all your Bitcoins in a casino.... See my point? Collateral is useless if the bank can't access it.

It doesn't looks good, pretty much like a honeypot.

This will be a gold mine for $5 wrench attacks.

[franky1]

when you apply for a loan to invest in a house, crypto-assets are not taken into account in your wealth…
~
This platform would allow any bitcoin users to “prove” to anyone that he actually owns some bitcoin.

And the day day after your loan is approved, you lose all your Bitcoins in a casino.... See my point? Collateral is useless if the bank can't access it.

It doesn't looks good, pretty much like a honeypot.

This will be a gold mine for $5 wrench attacks.

yep when using it as collateral for a loan it should be moved into a 2-of-2 multisig(escrow) where its giver, taker decide to sign out the value when conditions met. so no one side can steal funds without the other side agreeing

but for just proof of wealth, most wallets and websites scripts can verify a address, so i dont see a point in this topic creators "platform" to need a middleman just to certify wealth which would require more unnecessary parts that are already provided by bitcoin wallets

[NotATether]

I might have a better idea (although I am generally not a big fan of any sort of technology that involves revealing your bitcoin assets to the public):

Using the master public key, you can theoretically create an ECDSA or Schnorr (doesn't really matter which) signed message for your entire wallet.

Obviously, it will take into account BIP44 derivation schemes, so that only receiving and change address paths are checked.

The item that's going to be signed is the master public key, as well as the number of receiving and change addresses.

For verification, an address is given, and using the master public key in the signature, attempt to BIP32-derive a receiving or change address that matches the input address up to the given limit.

If the address is found to be a part of the wallet, then this is verification that the user providing it does in fact own the wallet associated with all those addresses, as well as any additional addresses that are past the limits without having to explicitly specify them. It can function as a sort of proof of funds.

It does destroy all user privacy though, so I'm not sure how this is ever going to be a useful thing. It would also depend on BIP322 getting finalized. It's moving at a snail's pace so far.