Stefan Thomas of the BitcoinTalk forums announced the results of his Bitfinex audit.
And here are the important details:
- Audit was done free of charge. Get in touch with Stefan if you’d like to show your support for his work.
- Claim 1: Bitfinex controls a certain amount of Bitcoins.
- Claim 2: The amount from claim 1 is greater than the amount contained in the root hash of balances.
To verify claim 1, Bitfinex provided a list of their Bitcoin addresses and balances to Stefan. Stefan checked their records against the blockchain using libcoin. Following that, he audited it using code which you can find here.
To verify claim 2, Bitfinex provided Stefan with a list of anonymized user balances. Stefan then ran a code he had written himself, available here, which confirmed Bitfinex had more than 100% of the expected cryptocurrency reserves. In fact, noticeably more–with all accounted for, likely at least 5% more than necessary.
This is great news on multiple fronts. First, obviously, I’m happy that this exchange is on the up-and-up. For a long time, I’ve supported them, and it’s finally good to have this Bitfinex audit to point to when people ask.
As a second, perhaps less obvious point, this is midway through a turning point in Bitcoin exchange history. The beginning of regular cryptographic audits like this will ensure consumer security for the future, and prevent the formation of another MtGox. We, as a community, can self-regulate using blockchain technology. That’s the point of it all, after all: trustless proofs. That is what we’re all so very excited for–perhaps we should get started using it to protect ourselves and those who will join our community in the future?
The Bitfinex audit allows the exchange to join two others: Bitstamp and Kraken. Going forward, these are the new standards of excellence in the community.