Market Analysis: Crypto Turns to an Oil-Patch Tradition to Right Itself

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Crypto Market Analysis: Exchanges' newfound commitment to adopt proof-of-reserves measures echoes practices long followed by the oil and gas industry. GWilliamsJr_CMT reports

– raised the question about an industry-wide epidemic of balance sheets being out-of-whack or improperly managed. The current, intense period of reassessment will likely morph from “who uses proof-of-reserves” to “who uses it most often.”

Below is the most recent oil and gas proved reserves report for the U.S., released Jan. 13, 2022. As you can see, the U.S. proved reserves declined 19% between Dec. 31, 2019 and Dec. 31, 2020.“Proved reserves” are widely recognized as having a 90% chance of successful extraction. Lower tier categories, “probable” and “possible” reserves, denote much lower probabilities of success, but are often justifiably excluded from a company’s valuation.

Cryptocurrencies' efficacy as mediums of exchange, units of account and vessels to store value remain intact. Decentralized finance, which operates on code, fared especially well during the turmoil, although the odds of DeFi being carved out of the criticism caused by centralized failures are low. Crises have a way of sweeping up everything in their path.The analogy between a crypto-based proof-of-reserves audit, and that of an oilfield is not perfect.

 

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GWilliamsJr_CMT PoR (proof of reserves) - the next iteration of transparency that is long overdue

GWilliamsJr_CMT Ironic....these exchanges are touting how secure they are by providing proof of reserves....which arr all backed by FIAT CURRENCY..created out of thin air by ...uhmm...the same entities that control Gov. ..the same gov people are begging to do the right thing 🤔😵‍💫

GWilliamsJr_CMT Doesn't matter unless you can see proof of liabilities as well.

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