Trace Mayer has already come up with it, it is called: Proof of Keys, happens on the every 3rd of January


You can read more about it here:
https://www.tracemayer.net/
https://www.proofofkeys.com/

Or watch him:
https://www.youtube.com/watch?v=hquWmLCoCNI

Some exchanges can actually not allow their users to withdraw all funds the same day and at once. I can still remember just before proof of keys day celebration, some exchanges disable withdrawals, while some went on periodic maintenance. All these were just form of excuses to not open their asses. This is why it's much more safer to leave little fund on exchange and have major portion on a secured private wallet.

The balance on the blockchain can't be faked, but the balance displayed to users in their centralised exchange/web wallet/casino/faucet/etc accounts can absolutely be faked.  So unless you know the combined total of all the balances being displayed to all those users, you won't know if that figure matches the figures shown on the blockchain.

I think it's true, sometimes the stock exchange keeps a number of coins in the spare wallet. Like yesterday's binance when hacked, binance moved part of the exchange into a cold wallet. this is a way to secure if there is hacking.

see them calling #safu https://twitter.com/cz_binance/status/1125956811574484993

lets say we did that crazy thing you are suggesting here. what then?
we obviously will become sure that many exchanges are shadier than they looked but that still wouldn't change anything. people will have to continue to trade somewhere and as long as there is no better alternative, they have to accept the downsides of these shady ones.

If I remember right, In the same day, Bitfinex stopped withdrawals and some other small exchanges (like hitbtc) also were having troubles with the withdrawals.

Nothing major happened that day (2019 was the first Proof of Keys event btw) but remember it wasn't a one-time activity, this event is going to happen every year. Most people, even in this topic,  weren't even aware of it when it was happening.

These stuff take time, over the years I believe It is going to develop into something bigger. It is called "the snowball effect"

When it becomes big enough, it'll be strong enough to destroy the exchanges which play the fractional reserve game.

Just watch Trace Mayer, he explains it very well.

edit:

Bitfinex Failed the Proof of Keys Test Says Trace Mayer

We can do that but the attempt wouldn't be successful because exchanges are in control of different transactions and they can't accomodate a huge number of transaction that you're trying to say. We will just ruin the flow and destroy most of exchanges through that so I guess that isn't a good idea.

I think high exchanges always have bitcoin available, at least the bitcoin we hold on their websites, but maybe some smaller exchanges not have all bitcoin available and maybe some of smaller exchange will close the business if they not get enough people to trade on.

this is cool and interesting, has it had a big effect anywhere? never noticed anything about it