Proof of Keys Event May Highlight Centralization of Crypto, but Some of Its Claims Are Unfounded

Organized by crypto investor and podcast host Trace Mayer, it urged cryptocurrency traders to withdraw their holdings from crypto exchanges, in order to promote the decentralization and monetary independence on which Satoshi Nakamoto's vision for Bitcoin was founded.

As ostensibly positive as its message was, it was claimed on social media in the days leading up to the event that several exchanges - most notably HitBTC - had apparently been freezing accounts and preventing users from withdrawing their funds.

For one, exchanges have a record of halting withdrawals and freezing accounts as part of their normal business, so it's not certain that HitBTC or any other exchange was specifically opposing Proof of Keys and trying to prevent a mass reclamation of Bitcoin.

It is hard to sustain a narrative that exchanges in general were deliberately subverting Proof of Keys or unable to deal with the sheer number of withdrawals.

Equally disconcerting, there are a number of negative reviews of the exchange on crypto news and reviews sites, such as 99Bitcoins and CoinSutra, with experienced reviewers on both sites making explicit reference to difficulties in withdrawing.

He has a significant stake in seeing wallets such as Armory succeed, something that would be possibly only if crypto traders and holders shook off their dependence on such exchanges as HitBTC. And what would be a good way of encouraging people to abandon exchanges in favor of wallets like Armory? That's right, you guessed it: some kind of event that piggybacks on the interest in Genesis Block Day and that effectively involves urging people to take their crypto out of exchanges and put it in Armory and other wallets.

The Proof of Keys event raises an important question that has often been swept under the rug by the crypto community: Are centralized exchanges really compatible with decentralized currencies that, in theory at least, are meant to be novel and radical precisely because they promise to make big financial organizations obsolete?

Still, it's likely that the existence of big crypto exchanges is introducing the kinds of price and market distortions that Bitcoin and other cryptos were meant to avoid.

"In the the unregulated space of crypto exchanges there is a 100 % certainty of corruption. This is exactly the same as centralised stock exchanges in the traditional world, there is a 100 percent certainty that somewhere, someone is engaging in corrupt practices."

There have been allegations that other major exchanges have manipulated crypto markets, and while such allegations are unproven, they join with Proof of Keys day in highlighting the often opaque nature of crypto exchanges, and of the arguable need for cryptocurrency holders to become more independent in how they manage and trade their coins.