"Is my cryptocurrency really safe?" What are the "signs of safety" that we can learn from the latest report from the exchange MEXC?
Hello everyone! I'm John, your guide through the metaverse and Web3 world.
Recently, many people have become interested in cryptocurrencies such as Bitcoin. However, have you ever felt uneasy about depositing money in an exchange, or wondered if it was really safe?
To ease such concerns, there are some "proofs of trust" that companies are working on. Today, I would like to introduce some important keywords to protect your assets based on the latest news announced by MEXC, a major cryptocurrency exchange."Proof of Reserves"I will explain it in an easy-to-understand way for everyone!
Let's start with the basics! What kind of company is MEXC?
Before getting into the main topic, let me briefly explain MEXC, the main character of this article, and the cryptocurrency exchange it is classified as.
A cryptocurrency exchange is a place where you can buy digital money (cryptocurrency) such as Bitcoin and Ethereum with Japanese yen, exchange it for other types of cryptocurrency, or deposit it."Banks and brokerages for digital assets"It is easy to understand if you think of it as a cryptocurrency exchange. MEXC is one such exchange with many users around the world.
Why was a "sign of security" necessary?
When we deposit money in a bank, we have a certain degree of trust, thinking, "This bank is safe." This is because banks are protected by strict rules and laws established by the country.
However, the world of cryptocurrencies is still new, and there are areas where rules have not yet been created. Unfortunately, in the past, there have been cases where exchanges that went wrong were unable to return the assets that users had deposited.
With this in mind, we want to emphasize that "our exchange properly stores all of the assets entrusted to us by our customers!"Companies need to prove it themselvesThis became a "sign of security" to gain the trust of users.
A thorough explanation of the hot keyword "Proof of Reserve"!
That's where the"Proof of Reserve", in Japanese"Proof of reserves".
This is a procedure in which exchanges have the contents of their vaults audited by external experts and are able to provide objective data to prove, "Look! All of the assets you have deposited with us are safely here. In fact, we have even more than that!"
It's like a hotel cloakroom attendant showing off vouchers for all the coats they've left with you. This gives customers peace of mind knowing that their assets are in good hands.
What's inside MEXC's latest report?
Well, the recently published "Proof of Reserves" report by MEXC has some encouraging news for users. Let's take a look at the main points!
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Maintain over 100% reserve ratio for all major cryptocurrencies!
This means that MEXC actually holds more than 100% of the amount of all major crypto assets that are held by users. For example, if you deposit 100 yen worth of assets, MEXC has more than 100 yen in its safe. In technical terms, this is called "over-collateralization," and it shows that there is a large cushion of security in the event of an emergency. -
Bitcoin reserves increased by 10%!
The company has increased its holdings of Bitcoin, the "king of crypto assets," by 10% from before. This is a sign of the company's desire to further strengthen its financial strength and increase stability. -
Increase stablecoin liquidity!
First, a "stable coin" is a special cryptocurrency designed to have a stable price, and many are made to have roughly the same value as real currencies such as the US dollar. And "improved liquidity" means that by increasing the reserves of these stable coins, it has become easier for users to trade smoothly at any time and convert them into Japanese yen and other currencies. This is very good news that directly relates to convenience and safety.
What does this news mean to us?
What we should learn from this MEXC announcement is:"Transparency"The importance of.
When choosing a cryptocurrency exchange, low fees and a wide range of stocks are of course important, but"Do you regularly publish your Proof of Reserves?"Please add this to your checklist.
Choosing a company that properly discloses information and is serious about protecting users' assets should be the first step to enjoying the new metaverse and Web3 world with peace of mind.
A word from the author, John
There are still many new technologies in the world of cryptocurrencies, and they can seem a bit scary, but it's very encouraging to see companies like MEXC continuing to make efforts to demonstrate transparency. I hope that this trend will spread throughout the industry, and that we will see a world where everyone can participate with confidence.
This article is based on the following original articles and is summarized from the author's perspective:
MEXC Amplifies Bitcoin Reserves by 10% While Maintaining
100%+ Coverage Across All Assets