Blockstream Blockchain-based company created the Proof of Reserves tool with which cryptocurrency exchanges can confirm that they have reserves in Bitcoin.

The recent discussion Other Regarding Exchange distrust around, <br> we of think IT's time for the industry to the Settle on a standard for Proving #bitcoin holdings, SO <br> we've a new Be published the open-source tool Proof of Reserves. Don't trust. Verify. ??? https://t.co/uKqlJjLU1x pic.twitter.com/kU8kIesqA6

– Blockstream (@Blockstream) February 5, 2019

Proof of Reserves creates a transaction that uses all unspent transaction exits (UTXO) of the exchange and adds one incorrect exit. Thus, the entire transaction is considered incorrect and will not be accepted into the network, however, it also confirms the solvency of the site.

Initially, the solution was created for the sidechain Liquid , launched in October 2018, but later it was decided to expand its scope.

Developers have warned that, for the time being, the evidence generated by the Proof of Reserves tool may contain too much critical information. In this regard, they offer the exchanges either to use Liquid Sidechain, or to wait for the release of an improved version of the software, access to which can be provided to any client of the trading platform.

Recall that in January, Blockstream unveiled a third version of the Cryptocurrency Data Feed service , which collects information on trading pairs from more than 30 exchanges.

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