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Proving reserves doesn't help at all. They can die at any time from massive loss. Proof of reserve reveals whether there's a problem; it doesn't prevent any problem from happening.

To use a metaphor, a failed proof of reserve is like detecting that someone who's riding a motorcycle without a helmet has been launched into the air due to a car crash, and is about to hit the ground. That doesn't change the fact that they're not wearing a helmet in the first place. And in bitcoin's case, no such "helmet" exists. There is no protection for consumers against losing their funds by the exchange.

There's always going to be this massive risk of the coins disappearing due to any number of reasons: that they get hacked, that the founder steals them, that they lose them to some massive technical problem, that they experience another undocumented bitcoin protocol issue like malleability, that they lose access to their cold storage wallets, etc.

This has happened at, what, a dozen exchanges so far? They've all died due to one of the above reasons. Who's next? It's completely possible that Coinbase is next, and that you're recommending users throw their money away by trusting them. There's no reason to trust Coinbase. Keep your funds in your own secure cold storage wallet, and you'll have them forever. Keep them in Coinbase and you'll have them exactly as long as Coinbase lasts.



> Keep your funds in your own secure cold storage wallet, and you'll have them forever.

In regards to Coinbase, if only because their terms make it clear they aren't liable for a customer loss of any cause whatsoever.




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