Bitcoin's value has dropped to $1,000 per coin on the Bitfinex exchange. Bitcoin is a decentralised currency that can only be exchanged for cash or other assets. The system uses an algorithm called 'proof of assets' which shows how much money you have in your account at any one time. But this method doesn't work if there are non-liquid assets such as investments with long lock up periods and no ability to withdraw funds.
This week, Anna explores the topic of proof of solvency with Kostas Chalkias, co-founder and chief of Cryptography at MystenLabs. They cover Kostas’ background in Cryptography and explore his work on Proof of Reserves, otherwise known as Proof of Solvency. They review past Proof of Solvency models using ZKPs and look at the protocols that major centralized exchanges are currently using. Then they dive into the security vulnerabilities, privacy issues, and general bugs that Kostas and his collaborators have identified in these protocols and their recommendations on how to better build Proof of Solvency systems.
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Today’s episode is sponsored by Aleo
Aleo is a new Layer-1 blockchain that achieves the programmability of Ethereum, the privacy of Zcash, and the scalability of a rollup.
If you’re interested in building private applications then check out Aleo’s programming language called Leo. Visit leo-lang.org to start building.
You can also join Aleo’s incentivized testnet3 by downloading and running a snarkOS node. No sign-up is necessary to participate. For questions, join their Discord at aleo.org/discord.
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