Bitfinex, BitGo partner on world’s first real-time proof of reserve Bitcoin exchange

Posted On 03 Jun 2015

Tag: Bitfinex, BitGo, Mike Belshe, Proof of reserve Bitcoin exchange, Zane Tackett

Bitcoin exchange Bitfinex announced Wednesday a new Bitcoin settlement and security architecture that, for the first time ever, provides total segregation of all customer Bitcoins. Based on BitGo’s multi-signature technology, the Bitfinex exchange now offers individual multi-sig wallets for each customer, allowing traders to confirm funds on the blockchain for total transparency while retaining institutional-grade security.

“The era of commingling customer Bitcoin and all of the associated security exposures is over,” said Zane Tackett, director of Community & Product Development at Bitfinex, in a press release sent to CoinReport. “The trading community has long sought individually verifiable accounts without sacrificing security or performance. With the help of BitGo’s multi-signature technology, the Bitfinex team is very excited to be the first exchange in the world to automate Bitcoin settlements using ‘On-Blockchain’ customer segregated wallets.”

Comparable to gold exchanges that offer proof of physical gold, the Bitfinex exchange allows for near-real-time verification of customer Bitcoin balances as verified by the blockchain. All funds and private transactions are secured with multi-institutional, multi-sig, two-step authentication and advanced polices that support institutional and individual trading activities.

“We’ve been working with Bitfinex for several months and are impressed by their dedication to security for their users,” said BitGo CEO Mike Belshe in the press release. “The industry has been clamoring for exchanges to adopt the multi-sig model, and we’re proud that Bitfinex selected BitGo’s platform to do it. This new level of transparency and security makes breaches such as those of Mt. Gox impossible.”

Bitfinex previously implemented security to its exchange through a shared pool, similar to using one set of keys to access an entire bank vault. The company now uses a unique set of keys for every user, and separates each users’ funds from the blockchain. The partnering firms say the combination of BitGo’s multi-sig technology with Bitfinex’s exchange reduces most of the shared pool security risks while also enabling users to confirm their individual holdings on the blockchain.

Image via BitGo’s press kit

About the Author

Katherine Fletcher is a writer and editor based in London, Ontario, Canada. With a graduate degree in journalism, Katherine spent more than five years curating news on Canadian higher education for a marketing consultancy. Her interest in reporting on Bitcoin stems from her belief that digital currency is, and will continue to be, a disruptor in how we conceive modern currency.