REASON WHY PROOF OF RESERVE MATTERS ON EXCHANGES

Hello to everyone in this great community today. I greet you all in good spirit and I want to believe that we all are doing just great today and if so we give God the praise for the sustenance of life and good health.

I welcome you all to yet an amazing day and as such, I want to believe that we all are doing just okay at whatever we are having at. Also, I hope we are all having a stress-free week at work.

Today as usual, I am here again to discuss with you all regarding an important topic regarding the cryptocurrency market exchanges. Previously, we talked about what proof of reserve in exchanges is all about and also we got to understand the need for proof of reserve on all exchanges platforms.

On that note, we will be talking intensively about the REASON WHY PROOF OF RESERVE MATTER ON EXCHANGES. So, today we will have to finish up the discussion regarding proof of reserve thereby discussing why it does matter on exchanges. I urge you all to sit tight and relax as I begin the discussion for today. I wish you all a happy reading!

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Previously we talked about proof of reserve and we got to see the what it entails and what it contributes to any digital currency market exchange platforms. For the sake of those you where not here with us the last time, I will have to drop a brief recap regarding all we have said about proof of reserve.

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Proof of reserve is seen as the ability of which a given exchange platform showcases that it has enough funds that can cover it user's deposit on the exchange. This in essence, is trying to tell us that, the proof of stake regarding an exchange is the scenario by which the exchange let it users understand that there is enough capital to cover for their deposit.

This is what is expected of any legitimate digital currency market exchange platforms, users should be sure and have confidence regarding their asset deposited on the exchange platform in question. With this comes comfort and trust for the platform. When users understand that no matter what happens, their assets are in safe hands, they will gladly stay and continue to make use of the platform with ease.

I believe with the above explanation, we already know what proof of reserve is for those that are just joining the conversation now. Alright haven said that, let us all move down to the main discussion of the day.

REASON WHY PROOF OF RESERVE MATTER ON EXCHANGES

This is the main discussion of the day and this discussion is all about the proof of reserve and why it does matter on exchanges.

The proof of reserve is very crucial and as such, it really matter a whole lot to it all the digital currency exchange users. The reason why it matter is that, when an exchange platform possesses enough personal funds to run the exchange, it gives users high hopes that their money is totally safe and secured.

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For an exchange to be a good exchange that can lure users to making use of it, is the ability for that exchange to have enough funds on their own which is used to run the platform effectively and not waiting or relying on the funds of users to make use of.

It is unwise to make use of exchanges that does not reve it proof of reserve as this can be an issue of concern. Your money is only safe when the financial health of a particular exchange you make use of is stable and well managed else if you make use of exchanges that it financial health is not stable, then there may be an unforseen circumstances that may likely arise in the future.

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Bankruptcy is not an exception scenario of an unforseen circumstance. When an exchange does not have enough capital to cover up for users deposit, then withdrawal becomes an issue because of little or no capital at all. When an exchange solely depends on users asset to keep the exchange going, then there is indeed a problem and such exchange can not guarantee the safety of your assets.

It is expedient that exchanges gain the confidence of their users and the only way to gain the trust of it users is to make sure that they have enough capital to cover all the deposits that are ongoing on the platform.

CONCLUSION

Allowing users to withdraw or transfer their assets from the said exchange to another without delay or restrictions is required. This will aid trust and build strong bonding spirit between the exchanges and it users. With the above, trust is built between both parties and everyone will smile at the end of the day.

Thank you all for having me today. I hope the discussion was beneficial to you all. When next I am here, we are going to be discussing more about the next topic but for now, I wish you all a lovely day ahead.