This year in January, Bitcoin users officially carried out the first proof of keys event, where users take their Bitcoin from third-party storages and move them into private accounts that only they can control.

The Proof of Keys is a movement that was started by Trace Meyer, a crypto-investor, to celebrate the 10th anniversary of Bitcoin’s Genesis Block. It poses the question as to whether digital assets exist since their value is only associated with the ownership of a private key.

Proof of Keys dictates that Bitcoin owners move their coins from exchanges into cold storages such as secure hardware or paper wallets that will give them full control of their private keys.

Many users own bitcoin through a third party, a crypto- exchange. The exchanges technically own and therefore have full access and to the stored cryptocurrencies and can do whatever they want with them. The risk is significant because if the exchange gets hacked or if services go down, all the Bitcoin held by the exchange is lost. This method denies users total ownership of their digital assets.

There have been cases where transactions in an exchange have completely been halted after a hacking attack or the disappearance of an exchange’s CEO. Proof of keys could eliminate such risks by completely decentralizing crypto-storages.

Proof of Keys Has the Potential to Completely Decentralize the Bitcoin Network

The migration process is private as there is no way to track whether users withdrew their money for spending or for transferring into private hardware devices.

After migration, the next step involves spinning up a full node that keeps track of every bitcoin transaction and all the rules that hold together the global network. There are many nodes available for purchase by developers that can help users to validate all the transactions that are following the rules independently.

The Proof of Keys is currently only widely used for Bitcoin. The end goal is to make crypto exchanges obsolete by doing it for other major cryptocurrencies, as well.

Experts, however, urge people to understand the Proof of Keys concept, before withdrawing their coins from exchanges, so that they can understand how to store them properly.

The drawback of proof of keys, as noted by some participants, is that it takes a lot of time to learn and understand, but in the end, the effort is worth it.

The Movement Approaches its Second Anniversary

As the second event approaches on the 11th celebration of Bitcoin’s Genesis Block, large numbers of users have already withdrawn their Bitcoin from exchanges and stored them in private addresses.

Trace Meyer, the leader of the Proof of Keys movement, stated that they had seen results, and crypto exchanges are starting to collapse. He also included a Google Form on the Proof of Keys website for users to assist in tracking how many are participating.

As much as Proof of Keys offers users to control and overall managerial responsibility for their money, some prefer convenience over independence. These types of Bitcoin users are likely to continue using private keys from third-party providers.