proof of reserves and proof of liabilities and fractional reserve

https://bitcoin.stackexchange.com/questions/45907/what-does-proof-of-reserves-and-proof-of-liabilities-mean

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Proof of reserves: This is proof that you actually control at least a particular amount of particular assets.

Proof of liabilities: The is proof that you do not owe more than a particular amount of particular assets.

So, for example, if an exchange can prove that it has reserves of 15,000 Bitcoins and that its owes its customers no more than 14,500 Bitcoins, then it has proven that its Bitcoin holdings are solvent.

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answered  Jun 14 '16 at 20:41

David Schwartz

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  Does "proof of reserve"s mean the same as "proof of assets" ? Thank you – elenaa Jun 17 '16 at 19:02
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  @elenaa They can have slightly different implications, but their meanings overlap. For example, if you wanted to borrow my car and I wanted to be sure you could pay for any damage you might do to my car, I might demand a proof of assets. But that wouldn't be a proof of reserves because no obligation currently exists to reserve funds to meet. Reserves are assets reserved to cover specific liabilities. – David Schwartz Jun 17 '16 at 20:04