Author: Billy Tetrud 2021-07-06 06:02:45
Published on: 2021-07-06T06:02:45+00:00
The conversation discusses the limitations of proof-of-reserves (PoR) and the auditability fallacy in the context of Lightning channels and custodians. It is stated that a thief who has a copy of the key can sign a transaction that spends it, invalidating any balance attestation, and knowledge of keys is easily copyable. However, if the PoR network is cohesive, people could validate that addresses and their balances aren't shared by anyone within the network. The conversation also highlights the difficulty in detecting insolvency and preventing it, as companies will try to cover it up due to the lack of downside in doing so. While perfect accuracy isn't possible, independent audits can attest that the PoR matches reality. Additionally, Lightning channel states change quickly, making it difficult for a custodian Lightning node to make an atomic proof-of-reserves of all channels. Despite these limitations, PoR is still worth doing to provide evidence that we live in a landlocked city far from any lakes, seas, or rivers.
Updated on: 2023-06-15T00:11:11.803844+00:00