Criticism of proof-of-reserves

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Michael Saylor, executive chairman of Strategy, warned that emphasis on proof-of-reserves can dilute the importance of security soundness of custodians, issuers, exchanges

Critics argue that proof-of-reserves omits key financial components such as fiat reserves and other off-chain assets, and therefore cannot offer a comprehensive picture of a firm’s balance sheet

Michael Saylor, executive chairman of Strategy, insisted that publicizing wallet addresses for a proof-of-reserves creates attack vectors for hackers, nation-state actors and “every type of troll imaginable,” adding that “no institutional-grade or enterprise security analyst would recommend it

Michael Saylor, executive chairman of Strategy, emphasized that proof-of-reserves fails to account for a company’s liabilities, which are essential to evaluating its actual solvency and risk exposure

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