Before Peoples Reserve issues a Self Repaying Mortgage, we confirm the amount of Bitcoin you own using Hoseki, a Bitcoin verification service. This is a cryptographic Proof of Reserves: it confirms your holdings without ever taking custody of your funds or exposing your private keys.
This article explains what Proof of Reserves is, why it is required, and how your verified amount shapes your mortgage terms. It is a one-time step completed during your application.
What Proof of Reserves Means
Proof of Reserves is a verified confirmation that you own and control a specific amount of Bitcoin at the time of your application. Rather than relying on screenshots or exported statements that cannot be independently trusted, Hoseki verifies a signed message from your wallet. That signature proves control of your funds without moving a single satoshi.
Why Peoples Reserve Requires It
A Self Repaying Mortgage is underwritten against your Bitcoin. To structure your loan responsibly, we need reliable evidence of the reserves backing it. Proof of Reserves allows us to:
- Confirm ownership of the Bitcoin supporting your mortgage.
- Verify the exact amount without relying on unverifiable documents.
- Set accurate terms, including your LTV and interest rate.
You retain full custody throughout. Verification confirms control of your Bitcoin. It does not transfer, lock, or grant Peoples Reserve access to your funds.
How Your Verified Amount Is Used
The amount of Bitcoin verified through Proof of Reserves sets your loan-to-value (LTV) ratio, which determines your terms.
100% is the minimum starting LTV: your verified Bitcoin must cover the full value of your loan before it can be issued. Beyond that baseline, you can overcollateralize by posting additional Bitcoin, raising your coverage up to 300% of the loan value. Your interest rate scales with both your overcollateralization and your loyalty tier: higher coverage and a higher tier both lower your rate. The lowest available rate of 1% requires 300% coverage at the Diamond loyalty tier.
Your final rate reflects a combination of both factors, so coverage and tier are considered together when your terms are set.
To learn more about loyalty tiers and how they affect your terms, click here.
| Coverage Level | What It Means for You |
|---|---|
| 100% LTV | The minimum starting point. Your verified Bitcoin covers the full value of your loan, qualifying you for a Self Repaying Mortgage. |
| Above 100% | Overcollateralizing with additional Bitcoin lowers your interest rate. The more coverage you post, the lower your rate. |
| 300% LTV | The maximum coverage level. Combined with the Diamond loyalty tier, this unlocks the lowest available interest rate of 1%. |
How Verification Works
- You receive a verification request. Peoples Reserve sends you a Hoseki request tied to your mortgage application.
- You connect your wallet or device. Hoseki supports hardware wallets including Trezor, Ledger, and Coldcard, along with a manual option for other wallets.
- You sign a message. This proves you control the funds. Signing a message is not a transaction and does not spend or move your Bitcoin.
- Hoseki verifies the signature. The confirmed amount is attested and shared back with Peoples Reserve.
- Your terms are set. With verified reserves on file, we finalize your LTV and interest rate, and continue processing your loan.
Your Security and Privacy
- Your keys stay yours. You never share private keys or your seed phrase with Hoseki or Peoples Reserve.
- No custody transfer. Your Bitcoin never leaves your control during this process.
- Minimal disclosure. Verification confirms ownership and amount without unnecessary exposure of your wallet details.
Frequently Asked Questions
Does signing a message move my Bitcoin?
No. A signed message proves control of an address. It is not a transaction and cannot spend your funds.
Do I have to give Peoples Reserve access to my wallet?
No. You prove ownership through Hoseki. We receive confirmation of your holdings, not access to them.
Is this a one-time step?
Yes. Proof of Reserves is completed once during your application, before your mortgage is issued.
How do I get a lower interest rate?
Your interest rate scales with two factors: how much you overcollateralize above the 100% starting LTV, up to 300%, and your loyalty tier. The lowest rate of 1% requires 300% coverage at the Diamond tier. To learn more, see Loyalty Tiers and Benefits.