Proof of reserves (PoR) is an accounting method used by cryptocurrency exchanges and wallets to demonstrate that they have the assets they claim to have in their accounts.

It is a process whereby customers can verify the amount held in reserve by an exchange or wallet provider.

PoR involves providing customers with a proof of balance, which can be used to assess whether the exchange or wallet has enough funds available for customer withdrawals.

The most common form of PoR involves comparing the exchange's current holdings with its blockchain records, thereby ensuring that all transactions are accurately recorded and accounted for. This ensures transparency and encourages trust between the customer and provider.

Additionally, some exchanges may also use software-based solutions such as third-party auditing systems to provide customers with additional assurance about their cryptocurrency holdings.