Early Bitcoin adopter, investor, podcast host, and “ardent defender of the freedom of speech” Trace Mayer has already given a reminder that there are just 60 days to go until the next ‘Proof of Keys’ event on January 3, 2020.
Mayer is a highly influential person in the cryptocurrency space. He was instrumental in aiding Caitlin Long with the US state of Wyoming’s blockchain laws and is the instigator of Proof of Keys, an event he’s trying to make annual.
What is Proof of Keys and why does it matter?
Proof of Keys is a movement that Trace Mayer started through his Twitter account. Every year, on January 3, cryptocurrency holders are encouraged to move their holdings off of exchanges like Coinbase and Binance and into a secure private wallet.
Less than 60 days until #ProofOfKeys. Who is participating in 2020? Change your handle yet? [Jan/3➞₿🔑∎] 💪
— Trace Mayer [Jan/3➞₿🔑∎] (@TraceMayer) November 5, 2019
Mayer has always taken a keen interest in advising people to take control of their private keys. As we’ve seen from many dismal statistics and even the latest seizure of Einstein Crypto Exchange by the Canadian Securities Regulator, if you keep your crypto assets on a ‘trusted’ third-party site, you do not own them. They are owned by the exchange which can freeze your wallet, go insolvent, pull an exit scam, or be hacked.
If you are still keeping your crypto on an exchange (which, by the very definition of the word, should be a place to do just and only that), your investments are at risk. Proof of Keys, therefore, attempts to accomplish several feats. First, it is a way of creating awareness of the fact that users should be in control of their own private keys.
Second, it urges us to take cybersecurity threats seriously. With more than $1.2bn stolen in hacks and scams in Q1 2019 alone and even Binance hacked this year, it’s an ongoing and serious issue. Proof of Keys forces those who take part to refamiliarise themselves with how to create a Bitcoin (or another cryptocurrency) wallet and make transfers securely.
Third, Proof of Keys is meant to test that cryptocurrency exchanges do, in fact, have the number of assets they say they do. It is a test of their financial solvency. As we saw last year with HitBTC freezing account withdrawals ahead of the Proof of Keys event, this is not a certainty.
Most importantly, Proof of Keys is meant to teach cryptocurrency investors the critical lesson of taking responsibility for their own financial sovereignty. They only truly own the asset if they control their own private keys.
As Mayer has said many times, it’s about the need to:
“Declare and re-declare our monetary sovereignty.”
January 3 is when the Bitcoin genesis block was mined
That Proof of Keys is held on January 3 is no coincidence. The Bitcoin genesis block was mined on that day. Individual monetary sovereignty is, after all, one of the main purposes of Bitcoin. Being held on the celebration of Bitcoin’s birthday, the date is easy to remember.
Proof of Keys is an important event in the Bitcoin community. It forces us to remember that Bitcoin bypasses the need for a trusted intermediary and that we should be doing so as well.
After all, if you store BTC on an exchange that freezes your account one day and disappears the next, you have no way of ever accessing that Bitcoin ever again. To reiterate the words of Andreas Antonopoulos, always keep in mind, “not your keys, not your Bitcoin”.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.