Cryptocurrencies were invented to oppose the traditional centralized money system. We are all used to fiat money that is regulated by countries and national governments. The latter make decisions on their amount on the market, circulation, and other issues. However, making transactions with fiat money is not always convenient. These procedures not only take time but also become the subject of control. Cryptocurrency instead guarantees privacy and efficiency in whatever you do starting from trading on platforms like Exolix and ending with different investments. No wonder different digital assets gained so huge popularity. At the same time, some countries support crypto, as well as companies and individuals who work with it, while others ban such opportunities. Let’s discover the most crypto friendly countries and what they offer.

Which country has lowest crypto tax?
------------------------------------

What are the most crypto-friendly countries 2023? We expand our list with five more options here. Each option has its own opportunities and preferences. Therefore, study the issue carefully and you will find the dream region for your plans.

### Malta

This small island is well-known for a huge variety of blockchain projects and exchanges. Therefore, there are all important services for investors who can access and use them easily. Trading here is also more than popular. As for taxes, they are either small or even tax-free options exist.

### Switzerland

High banking standards and privacy are the key factors for fiat money owners who prefer to operate here. In addition, the local government also favors Bitcoin businesses. The friendly environment guarantees privacy and low risks and attracts crypto owners from other regions.

### Estonia

Estonia wishes to build a digital society and try to attract different novel companies from other regions with easy rules and pro-crypto laws. Here one can operate with crypto fully legally. The national bank works with this technology and the whole financial sector supports it. Moreover, the government wants to create a national crypto.

### The Netherlands

The local government follows FATF guidelines and regulates crypto according to them. Therefore, it is easy and convenient to launch a blockchain organization here and get international certification to work under legal and transparent conditions.

### Canada

Canadian government welcomes this technology and does not restrict the utilization of crypto. Moreover, there are banks that work with such transactions and favor those who prefer it. There were attempts to centralize the utilization of crypto here. However, for now, previous rules are still applicable, and many crypto owners choose Canada for their activity.

Where should I move to avoid crypto taxes?
------------------------------------------

What regions are included in the list of crypto friendly countries and why? To begin with, it is worth mentioning that many developing countries are interested in this topic and try to support their economies with digital products. At the same time, different European crypto friendly countries are also common. Therefore, one should pay careful attention to the existing rules and then choose the region for the crypto activity based on them.

### El Salvador

One of the best crypto friendly countries with a pro-crypto government is El Salvador located in Central America. This small country was the first to make Bitcoin a legal means of payment. Moreover, each business here must accept such payments. For individuals who are interested in this type of investment, there are no capital gains or income tax. Therefore, it is one of the favorite places for such activities. In addition, 60% of this nation uses crypto that is equal to 4 million users.

### Singapore

Special rules for crypto are adopted in this country. They include both regulations to prevent illegal actions and measures to create a supportive environment for anyone interested in this area. In addition, a free tax policy also works here.

### Slovenia

This small country in Central Europe is another crypto haven on our list. The corresponding trading here is tax-free and there is no VAT on mining. Government supports and encourages those who move toward novel technology. In addition, here evolve many startups and the market capitalization here is very high. There is even a special BTC City – the largest European shopping mall where more than 500 stores accept transactions in crypto.

### Portugal

The crypto laws in Portugal attract mainly Bitcoin individual investors. They are free from capital gains taxes. In addition, when you exchange or swap crypto for fiat money, there is no extra fee for this. Thus, you can easily convert the required amount not losing on paying extras.

### Germany

For long-term investments, this option is the best among crypto-friendly countries. Here crypto owners are equal to fiat money owners. If you own it for more than a year, then tax-free laws start to be applicable. Thus, one can easily benefit here in the case of investment strategy.

Summary
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To select the country for operating with crypto, you should first decide on your aims and desires. Depending on the preferred strategy and resources involved, choose the country that has the proper environment. In some, you will find tax-free policies for trading incomes, and in others profitable conditions for long-term investments.

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Crypto-friendly countries can be found in all regions. They offer or tax-free condition, or low taxes, and their governments do not ban the activity of the owners of cryptocurrency

10 Most Crypto-Friendly Countries 2023 | Exolix

10 Most Crypto-Friendly Countries 2023

The year 2022 was harsh for crypto investors and the industry overall. The reaction of the crypto market to the implosion of the FTX exchange and the crush of Terra’s UST algorithmic stablecoin didn’t make us wait. The total market capitalization of crypto assets dramatically dropped in 2022, making a lot of investors cash out their assets and refuse to invest in cryptocurrency. Crypto scams 2022 – 2023 only added to the general tendency, making potential investors doubt their initial intentions and refuse to put their money into crypto. Today we’ll tell you about some of the most resonating crypto scams that actually happened within this crypto year.

What Are Crypto Scams? Types of Cryptocurrency Scams
----------------------------------------------------

Any attempt to get unauthorized access to another person’s or company’s crypto assets is qualified as a crypto scam. This may involve hacking their security codes and private data as well as deceiving crypto owners to send their assets to compromised digital wallets. Overall, crypto scams can be split into two types: • Scams that don’t require personal contact with the victim. Here belong hacking or stealing security codes, credentials for authentication with the digital wallet, or getting access to hardware. • Scams that require some personal interaction. This category includes fraudulent investment offers, impersonated demand for crypto assets from the victim, business offers that are scams, and similar schemes. The cryptocurrency scam news spread really fast now, so there’s always a chance to avoid getting into malicious schemes by learning about the most famous crypto scams and understanding how to differentiate between real business proposals and those aiming to steal your investments. We’ve compiled a list of the seven most spoken-about cryptocurrency scams that actually happened in 2022 – 2023.

The Tumbling Down of Celsius
----------------------------

The situation that happened in May 2022 became a huge blow to the entire crypto market. The stablecoin Terra and crypto token Luna failed, revealing one of the most famous cryptocurrency scams of 2022. The Vermont Department of Financial Regulation said this was nothing else than a financial pyramid where payments for the early investors were made with funds received from those who joined later. This scheme is as old as the world, and in the aftermath, many critics said that such an outcome was predictable due to the ridiculously high yields promised to the investors. Anyway, Celsius filed for bankruptcy and still owes 4.7 billion US dollars to its investors.

Normad Bridge Hack
------------------

In August 2022, another scandal with the crypto bridge became known to the world. Hacking a crypto bridge is no news in the world of crypto exchange. These structures have some vulnerabilities that scammers use to their benefit. The total amount stolen from this hack was $100,000,000. Yet that was only the beginning of the story. It has become one of the best-known crypto scams of the year due to the platform’s users looting the bridge themselves once the exploit got to the public ears. So the total investment loss in this scam reached $186 million. Such stories are one of the reasons to use reliable and well-secured crypto swap platforms like Exolix.

The Big Steal from Axie Infinity
--------------------------------

The users of a popular play-to-earn game “Avie Infinity” lost their crypto assets due to a cheeky hack in March of 2022. What’s worse, the Sky Mavis company owning the title didn’t know about the problem. The total amount stolen from game users reached $615 million, thus becoming one of the largest crypto amounts stolen due to a hack that year. While the game runs on one of the Ethereum-based sidechains, the breach wasn’t the fault of the Ronin blockchain. In fact, it’s Sky Mavis that lowered the security protocols in December 2021 and left things easy to get for scammers. The company promised to reimburse the financial losses to its clients, yet there’s no sign of it coming soon.

Collapse of FTX Crypto Exchange
-------------------------------

One of the latest cryptocurrency scams also became one of the most dramatic crypto investors’ financial losses. The collapse of the crypto exchange service FTX resulted in a $1 – 2 billion dollar loss for its investors. This happened in early November of 2022 after a report by CoinDeck concerning the leverage and solvency of the Almeda Research firm affiliated with FTX. Once the problem began, the FTX company CEO tried to find bailout funds, and Binance stepped in to buy some portions but eventually backed out. Within some days, the CEO of the company filed for bankruptcy following the Bahamas freezing their subsidiary’s assets. If not enough, a hack stole another $477 million from FTX investors, finalizing one of the biggest crypto scams of all time.

Warmhole Bridge Hack
--------------------

While the number of financial losses for crypto owners is less significant than in the previous story, the Wormhole bridge hack still entered the history of 2022. The story of this scam only proves the vulnerability of cryptocurrency bridges and the proficiency of scammers in hacking them. The thieves stole $325 million, and the crypto bridge had to temporarily shut down to stop the exploit. However, this didn’t help them return the stolen digital assets.

Beanstalk Becomes a Victim of a Flash Loan Attack
-------------------------------------------------

A flash loan attack on Beanstalk resulted in the attacker draining $182 million from the project. Unlike typical cyberattacks that aim to create exploits, Beanstalk became subject to breaking the protocol’s governance mechanism by an unknown threat actor who got the voting rights required for transferring crypto assets from liquidity pools. Eventually, this has become the most famous DeFi project attack of the year.

Wintermute Hacker Steals Private Keys of the Users
--------------------------------------------------

Wintermute cryptocurrency market became one of the victims of a series of hacks in the summer and autumn of 2022. By compromising the tool for creating the custom wallet addresses, the scammer managed to get the private keys of Wintermute users and drain the funds from their accounts. The total stolen amount reached $160 million.

Bottom Line
-----------

While the latest crypto scams don’t bring a lot of optimism to novice crypto investors, they shouldn’t stop you from putting your assets in cryptocurrency. Just be cautious and get involved with reliable and trustworthy services only.

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Crypto scams that actually happened within this crypto 2022 year

7 Crypto Scams that Actually Happened

Crypto scams that actually happened within this crypto year

No matter how long you are in the cryptocurrency market, you constantly need to watch it closely and pay attention to the changes and trends. Your constant vigilance is an important part of routine analysis. Thus, if you would like to know when to buy the dip and when to wait, you cannot do without it. At the same time, numerous factors influence the market and one of them is the so-called whales. Who are they and why do we need to follow their activity? How to track crypto whales? Here you will find the necessary answers.

### Basics of the term

If a person, a group of people, or some organization possess so much crypto that can influence the situation at the market, then they are called crypto whales. Just imagine a real whale who is moving in the ocean. His movement means a lot in the underwater world and changes the life of smaller inhabitants. The same logic is applied to the crypto whales who own 10% or more of the total amount of one or several coins. Whenever they make transactions, all the market participants feel the result.

Why and how to track whales crypto?
-----------------------------------

The activity of the big players always changes the value of coins. Therefore, when you track it, it becomes a part of your analysis and the reason to react correspondingly. You will not make blind decisions. Instead, you will get the data and gradually learn how to interpret them and use them to profit. If a crypto whale held a big amount of some coin, its trading becomes limited. The liquidity decreases, and it becomes more difficult to swap it or convert on Exolix. When whales start to act, there are two main consequences: • A great exchange inflow seems to be a dumping of a coin. Thus, the price usually decreases afterward. • If they remove a big amount of coins from circulation, prices begin to grow. In addition, other players react to these movements in their way of supporting or standing against the trend. Of course, they try to understand the internal logic of the transactions. It is quite complicated but the results are combined and we observe them immediately. Providing the importance of whales, special tools were created to follow them and their transactions. There is a variety of such trackers and we advise you to learn the basics of the most popular options and then select the one for your needs.

5 topmost crypto whale tracker tools
------------------------------------

A variety of special apps was designed for tracking and analyzing the activity of crypto whales. Using them, you will get quick reports on any big or unusual action. This information serves as a key for your own subsequent activity and will contribute to your success. For those who want to benefit, here is a list of five such tools from which everyone can select the best crypto whale tracker for himself.

### Whale Alert

If you search for a reliable bitcoin whale tracker, this service is a good decision. It also tracks other blockchains, for instance, Ethereum and HIVE. There is a free version for those who would like to give it a try but with the following limits: • without alerts; • transactions are limited by $500K; • only one-hour history of transactions is available. For $9.95 per month, you will get alerts for the chosen coins with transitions over $100K. Bigger transactions together with a full day's history are available for $29.95 per month.

### ClankApp

Beginners are fond of this free tool that can be used as an Ethereum whale tracker and tracker for 23 blockchains more. You can utilize it as an app, web version, or via Telegram or Twitter subscription. Alerts come as push notifications or emails. There is one disadvantage here, namely – the service does not provide charts and graphs on the activity over time. However, you can use it absolutely free to evaluate the current situation. Voluntary donations are welcome but they do not influence the service.

### Whalemap

Here you can create an account for free but take your time to learn the basics. The website provides all the required data and tutorials. Therefore, it is recommended to read them and get basic knowledge. There are even free courses in blockchain and trading. Thus, if you want to become an expert, here is the perfect chance to do it.

### Whale Watchers

If you are interested in NFT, this tool is for you. You can benefit from the free version or join the paid advanced Captain's Club. The latter has fast alerts, push notifications, and private servers for communicating with other users. The fee is in Ether and fluctuates between $90 and $115. The free tool is also informative, so you can start from it and then discover whether or not you need deeper insights.

### WhaleBot Alerts

This one is a free Telegram community where one can subscribe and get alerts when important transactions occur. The bot reveals big individual actions and creates top lists of recent transfers. Charts are rare here, so you will not get history or detail – just a brief overview. Altogether, the presented service may be quite useful if you understand how to benefit from it. Among modern tools, you can easily find crypto whale tracker dogecoin and other coins as well. As there are many free versions, do not hesitate to try different apps and choose a tracking tool that suits you best.

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Crypto whale tracker tools help you to follow the transactions that influence the crypto market the most, namely the activity of whales that can lead to a significant drop or rise in prices.

5 Crypto Whale Tracker Tools to Buy the Dip in 2023

There are legends in both investing in cryptocurrency and trading it. Every person who succeeded at one of the approaches proposes advice and standards to follow. However, newcomers often get confused while comparing crypto investing vs. trading and do not know where to start. Is trading crypto better than stocks? Before answering this question, let’s point out that these intertwined ways have core differences. Both investors and traders purchase crypto. But, the first group is ready to wait until the price goes up. While the second is ready to sell their BTC, RVN, or other coins according to the market volatility. Let’s compare day trading vs investing crypto in more detail so that you can choose your pathway with open eyes.

Basics of investments
---------------------

If you have enough funds and believe in some crypto, you can buy it and wait until its value will be appreciated. The time frame is going to be long and no one guarantees you the result. However, this strategy works well with such well-known options as BTC. Moreover, it may provide you with the unexpected profit from some other coin that becomes a hit.

Crypto trading
--------------

While trading, your task will be to follow the market fluctuations and act correspondingly. The main idea is to make a purchase while the price is low and sell when it goes up. However, it only sounds easy as the situation is quite unpredictable and your short-term activity will be constantly changing.

Is it better to invest in crypto or trading?
--------------------------------------------

Now let’s move on to the key differences that will influence your decision.

### Timing

The time frame for these two options differs significantly: • Investors utilize a long-term approach. They held their cryptocurrencies ‘for dear life’ and believe that in the future their price will definitely rise. Such waiting may last not only moth but also years, which requires patience and an ability to do other transactions without involving the chosen crypto. • Traders are short-term players who follow the volatility of cryptocurrencies and act quickly. Their time frame may take a few seconds only bringing high profits on the spot.

### Activity

The general idea is that the longer the period for investment, the lower the activity. Therefore: • Investors do not trade often and do not appear on the market daily. They are not interested in short-term changes and create the strategy for years ahead. • The number and frequency of activity for traders are high. They have to monitor the situation and react according to the changes that happen immediately.

### Analysis required

How do both groups decide what to do exactly? When do they exchange crypto and what are their reasons for making the next step? The answer to all these issues is the proper analysis. It is always required. Still, it differs according to the chosen pathway: • For investing, fundamental analysis is the basic tool. This strategy is like a long-term belief in the coin. Therefore, its fundamentals and potential must be thoroughly evaluated. Investors use a variety of metrics that differs greatly from those applied to traditional stocks. Thus, this type of analysis is not a routine but a real art. • For trading, technical analysis is the right option. To forecast the movements in the market and future prices, they analyze historical data together with technical indicators. Different platforms provide instruments of varying difficulty and accuracy. The task here is to learn at least the basics and then continue the development of your analytical skills.

### Costs required

There are different fees that you have to pay. Exchanges like Exolix have a range of fees for their services including swap, trading, and others. Miners get network fees. The average percentage is from 0.1% to 1% per trade. For traders with high daily activity transaction fees are in the first place. They may also pay some taxes according to the profit obtained. For investors, costs are generally less pronounced as they convert and trade less. As for your starting capital, it can be small or large. Here everything depends on your abilities and goals.

Risks of trading vs investing cryptocurrency
--------------------------------------------

Crypto is associated with high risk due to its volatility. Nevertheless, greater risks are related to bigger rewards. And that is one of the main reasons why this area gets so much attention. Coming to this world, you take some risk level that is marked as risk tolerance. That is another point where investors and traders differ: • Tolerance for risk while investing is smaller, as daily volatility means not so much for you. After a long time, this volatility has to smooth out and an upward trend must follow. • Risks are much higher for traders who must follow the smallest changes and try to benefit from them. Risk management is crucial for both cases. In addition, any activity with borrowed funds increases them.

### Profit

The profit comes according to the chosen strategy:
• Investors receive straightforward profits in case of price appreciation. The latter should cover the cost of investment, fees, etc. 
• Traders find their profits in price changes. They also use leverage to gain more on small capital. Still, it is a risky choice. Both a bull and a bear market give chances to gain for traders. As for investors, they need to wait for bear markets and not forget about airdrops, staking, and yield farming.

Summary
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In a nutshell, to select the strategy you have to think over time, costs, and risks. If taken seriously, each of the options described above will lead you to a profit. Traders can get it quicker but their risks are higher. Investors should be more patient and coherent.

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Crypto investing vs. trading is intertwined but different. Choose the successful strategy for your case taking into account the time frame, analysis and costs required, risks and profit.

Crypto Investing vs. Trading Which Suits You Better

When there is an opportunity to make money, there will be interest. The more money that is made through cryptocurrency trading, the more fintech startups with a crypto focus will attract funds. Over the last few years, it really seemed like crypto was the fastest way to get rich. Of course, if there’s ever a promise of getting rich quickly, there will be people ready to exploit the possibility.

Almost every investor or trader has encountered scammers, hackers, and thieves, either directly or indirectly. Today, we are going to find out if those people are an actual threat to your assets. We will also learn about ways to make sure your crypto stays safe.

Safety of Blockchain Systems: How Can Crypto Be Hacked?
=======================================================

The first step to finding out how crypto can be hacked is understanding how blockchain technology operates and how it safeguards user funds. There’s a concept in crypto called the “blockchain trilemma.” It refers to the fact that it is very hard (if not impossible) for a blockchain to simultaneously reach optimal levels of three key factors – scalability, security, and decentralization. 

Most cryptos, blockchain-powered apps, and NFTs choose security and decentralization. They boast top-of-the-line security features that ensure that once blocks have been added to the chain database, they cannot be tampered with, altered, reversed, or hacked. To put it bluntly, while blockchains are almost perfectly secured, there have been instances in the past when hackers managed to take advantage of security shortcomings.

51% Attack on Blockchain
------------------------

So, how can cryptocurrency be hacked? There is a possibility that an attacker or a group of attackers gain control over a blockchain by consolidating its computational power (hash rate). If the malicious actors control more than 50% of the hash rate, they can introduce a modified blockchain, completing the so-called 51% attack. This enables them to make adjustments to transactions yet to be confirmed before they unleash their attack.

How can Bitcoins be hacked after such actions? Well, let’s imagine a scenario where you decide to send 2 BTC to a friend. Before the transaction is confirmed six times, it is fair game to the hackers. They can easily reverse the transaction to steal the tokens. They will be transferred to a different address, and the adjusted blockchain will make it difficult to trace your funds.

We recently did a more detailed analysis of the 51% attack and the theory behind it, so click this Exolix blog link [HERE](https://exolix.com/blog/what-is-a-51-attack-and-why-does-it-need-to-be-detected) to read about it. If you don’t want to read the entire blog post, the short story is that it is borderline impossible to hack bigger cryptos. So, if you are wondering something along the lines of “Can Bitcoin blockchain be hacked in a 51% attack?” the answer is “no.” There is a possibility, but it is minuscule. Even in theory, it is almost impossible to take over at least 50% of the BTC hash rate.

Main Types of Crypto Hacks
--------------------------

Brace yourself for a shocking revelation – not only can cryptos be hacked, but there are multiple ways this can happen. Let’s examine the main types of hacks that have occurred in the past:

1.  Wallet hacks. Crypto wallets contain the keys to your crypto. Most people choose mobile/web apps to store their keys, and the sad thing is that apps get hacked all the time. We strongly advise you to stick to cold (offline) wallets.
    
2.  Exchange hacks. Why wonder, “Can cryptocurrencies be hacked?” when entire exchanges can be hacked? Since these kinds of platforms have robust reverses to ensure solvency, they are a very tempting target for hackers. If you do not store your keys on a specific site, then you are totally safe from this type of attack.
    
3.  Bridge hacks. In crypto, a bridge is something that helps traders convert their crypto funds from one blockchain to another. Similarly to exchanges, bridges are attractive because they hold plenty of funds at any given point in time. A good example of a bridge hack was when Harmony’s Horizon Bridge was exploited for $100 million.
    

Ways to Protect Your Crypto Assets
----------------------------------

A crucial way to protect your funds is by using cold wallets. You have to understand that aside from the very unlikely 51% attack, the only real way your money can get stolen is if your keys are compromised. Take extra steps to keep them safe by choosing non-custodial cold wallets.

While Bitcoin can be hacked theoretically, it is safer for you to stick to the better-known cryptos. Smaller projects are more vulnerable to the above-mentioned attacks and are more likely to attract hacker attention in general.

In addition to using cold wallets and choosing BTC or other top cryptos, you should also swap your current exchange for a safer one. At the time of writing, these are the most secure options:

*   Bybit
    
*   Binance
    
*   Huobi
    

Notice how we didn’t include Exolix in the list? That would have been highly unprofessional! Even though our site is indeed safe and can hang with the best of them.

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The first step to finding out how crypto can be hacked is understanding how blockchain technology operates and how it safeguards user funds.

Can Cryptocurrencies Like Bitcoin Be Hacked? | Exolix

With Big Money Comes Big Risk: Can Bitcoin Be Hacked?

Crypto is hot right now. Everyone knows that. However, not everybody is aware of the fact that the crypto custody option market is experiencing analogous growth.

What Are Proof of Reserves? 
----------------------------

Let’s begin with the definition of PoR and set out some key information. In regular banking or business, reserves are the revenue a firm sets aside as a reserve in case of a potential loss. They get audited from time to time to ensure solvency.

In crypto, there is a similar kind of review known as Proof of Reserves (PoR). It is defined as a fully independent audit carried out by an outside party to confirm that the project/firm/entity that is being examined has sufficient reserve funds to support the balances of all depositors.

With PoR, an exchange or a crypto custodian can prove to the public that they have enough funds to swap, withdraw, or convert at any given point in time. With the increased trust it brings from the public, a company that successfully undergoes a PoR audit can quickly attract new clients. The positive impact is beyond that because it also helps retain current clients along with other shifts. It might not result in exponential growth right away, but it certainly lays the foundation for this kind of boost.

What Is Proof of Reserves and How It Works
------------------------------------------

The second step in understanding how Proof of Reserves works is to make sure you have a basic grasp of the process itself. It is not really complicated, since this kind of audit, in most cases, can only go two ways: either there is sufficient solvency, or there isn’t. The audited exchange either has enough funds to meet long-term debts and other cryptocurrency obligations, or it does not.

The only exception to the above is fractional-reserve banking. With this system, only a portion of the crypto funds is kept as a reserve, and the rest is lent to borrowers.

### Main Steps of the Process

To make it easier for you, let’s break the process down into three steps:

*   Step 1: Proof of liabilities. In accounting, a liability is a future financial obligation to other entities or people based on past transactions or events. So, liabilities here are presented in the form of the outstanding crypto balances owed to the users. In this step, financial health is calculated based on the sum of all client balances, fraction factor hash, and the root of a [Hash/Merkle tree](https://en.wikipedia.org/wiki/Merkle_tree).
    
*   Step 2: Proof of reserves. This is where the sum of all account balances is calculated. The audit program that they run during this step is very nifty – it does not have to examine the entire blockchain; it utilizes a time- and resource-saving precompiler instead.
    
*   Step 3: Proof of solvency. The final step involves confirming that all software was run in an environment with a sufficient level of trustworthiness. At the end of the audit, you will be presented with two options – either liabilities (future financial obligations) exceed liabilities, or they don’t. If they do, then the audited platform is in bad shape and poses high risks to users, shareholders, and the company itself.
    

Carrying Out a Proof of Reserves Audit
--------------------------------------

The first thing to establish is that it is always a third party that carries out the audit. When auditing a platform, you can’t have ties with them: not directly or indirectly. Here are the steps that an auditor takes during the process:

1.  A third-party auditor or auditing company takes a snapshot of the platform’s balances. All depersonalized, of course. The balances are then fitted into a hash tree containing key custodial data.
    
2.  Individual contributions from clients are gathered. It is done using their unique signatures.
    
3.  The final step is confirming that the cryptocurrency assets of the clients are in full-reserve status, meaning that indicated crypto balances are, at the very least, equal to those fetched from the hash tree data.
    

Upsides of Conducting This Type of Audit
----------------------------------------

You now know what PoR entails and how it is carried out. Now, it is high time for you to learn about the main advantages of this audit method. Audited companies will enjoy the following benefits:

*   Simple method of restoring faith. Even if an exchange’s reputation took a hit, most users are willing to look the other way if everything is in order on the financial side of things.
    
*   Opportunities to improve. An audit can expose issues with your recordkeeping systems or any other internal issues that have the potential to affect the business adversely and should be addressed in time. When you fix them, you are on the path to improving quality for customers.
    

The biggest benefits to users include:

*   Great way to confirm your cryptocurrency assets are safe. Mismanagement of funds is a huge issue in the field of digital money. PoR audit confirms that the funds aren’t being used to generate additional profit for the company.
    
*   Easier to choose a platform to entrust your money to. With a reliable PoR practice, the exchange will look more attractive, so it will be easier for you to make a final decision.
    
*   Ability to monitor actual records of your crypto transactions. Not only that but it can be done in a quick and convenient way.

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Proof of Reserves (PoR) is defined as a fully independent audit carried out by an outside party to confirm that the project/firm/entity that is being examined has sufficient reserve funds to support the balances of all depositors.

Proof of Reserves: Discovering the Main Purpose of PoR

Almost every other article from the Exolix blog starts with something along the lines of “with the interest in crypto reaching a new high..” Indeed, crypto is hot right now. Everyone knows that. However, not everybody is aware of the fact that the crypto custody option market is experiencing analogous growth.

The Exolix cryptocurrency blog is dedicated to providing useful trading tips, guides. More guides, trading tips and latest crypto news.

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