Proving that we 100% back customer funds.

Bamboo is a micro-investments platform that allows anyone to seamlessly purchase digital assets. This is part 4 in our series on Proof of Solvency, check out our previous blogs for more information.

Being solvent means that 100% of all our customer funds are backed by our asset reserves. In the last blog post we explained how our customers will be able to verify the total assets that we have. However, to prove we are solvent we also need to show what we owe all our customers (our liabilities).

To prove that the Bamboo platform is solvent, we let each customer verify that our total assets and total liabilities are balanced (i.e. are equal).

When reporting these liabilities, we need to guarantee that two things are always true:

1. All customers have been included in the report, and
2. The amount owed to each customer is correct (i.e. we have not shortchanged anyone).

Our total liability is the sum of every customer balance in this report.

While we could promise to enforce these guarantees, we believe it is better to let customers verify these facts for themselves — minimising the need for anyone to trust us.

Being solvent means that 100% of all our customer funds are backed by our reserves.

Verifying the amount owed to you.

For privacy reasons customer details are anonymised and portfolio balances are encrypted. Each customer is provided a unique ID corresponding to their entry within the liabilities report. When they have located their encrypted balance, a special cryptographic technique known as a Zero Knowledge Proof enables customers to verify that their balance has been correctly included and encrypted without leaking information regarding their actual balances.

Each customer is able to look up their unique ID (uid) in the liabilities report. Alice is able to use a zero knowledge proof to verify that her balance of 0.005BTC corresponds to the encrypted value 657efabd…

Once they have verified the liabilities report is correct, they will be able to compare the total liability from this report with the total assets that we have reported. As both reports are completely verifiable by a customer, they have successfully (and independently) determined the solvency of the Bamboo platform!

We’ve been hard at work turning this theory into a reality, and next week we will begin unveiling how the verification will work in-app!

– With 🌱 from the Bamboo Team

The Bamboo App is now available for download on the iOS App Store.

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