WBTC or also known as Wrapped bitcoin, The bitcoin-supported ERC20 marker has been on the Ethereum main network since January 29 for its commercial exchange.
Information was Spread In social networks, Staked confirms not only the launch of a new token, but also the volume of assets released yesterday. Through the WBTC now 65,421 BTC presented in Ethereumwhich can be used in intelligent contracts for decentralized exchanges, market forecasting and decentralized loans, among others.
Wrapped bitcoin (WBTC) is now alive!
Currently, 65.4217 BTC is represented in the Ethereum blockchain.
– Bid (@staked_us) January 29, 2019
If this figure is correct, Ethereum will have a higher proportion of bitcoins represented on its network than those that currently exist in Bitcoin side chain, LiquidAccording to Liquid Horse, there are currently 53.32 BTC on this blockchain, which is about 12.10 BTC less than in Ethereum via WBTC.
If https://t.co/xAbNgsjy2i is accurate, it means that more BTC is already represented on Ethereum than on the liquid side chain pic.twitter.com/u8yZ0N8o6Y
– Adam Tyree Finch (@atyreefinch) January 30, 2019
The WBTC token is an initiative led by the launch of a BitGo cryptoactive repository, as well as the Kyber Network and Republic Protocol decentralized exchange points. The launch of this new token was announced in October 2018 through a press release explaining that Wrapped Bitcoin (WBTC) is an ERC20 token provided by bitcoins in a representative 1: 1 ratio. The main goal of this initiative is to combine Bitcoin liquidity and Ethereum programming language.,
WBTC is a symbolized representation in Ethereum of protected bitcoins. Users wishing to purchase Bitcoin Wrapped, go to Kyber Network and Republic Protocol exchange points, who own and distribute this ERC20 token, exchanging their bitcoins for this token. Thus, bitcoins delivered to casas de cambo are delivered to BitGo for safekeeping, the company that stores them in a multi-level wallet and provides WBTC instead.
All transactions with this token will be registered in the Ethereum network. The management will be carried out by the Autonomous and Decentralized Organization (DAO), which includes representatives of MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, Prycto, Kyber Network, Republic Protocol and BitGo. They clarify that in the future more participants will be able to join this DAO.
WBTC is a kind of representative bridge between two networks. Thus, decentralized exchange offices that create life in Ethereum can benefit from the liquidity of Bitcoin, which is one of the currencies with the largest volume of transactions in the market of centralized exchange offices around the world, such as Binance, Coinbase and Bitfinex-, its inclusion is representative of a pinned token,
"Today, most of the operations are done with bitcoins at centralized exchange offices. WBTC changes this by adding bitcoin liquidity to DEX (decentralized exchanges) and making it possible to use bitcoins for transactions with tokens, ”the press release says.
According to its creators, another feature proposed by the WBTC is that This ERC20 token will allow Bitcoin users to use Ethereum smart contracts.Thus, protocols for loans, bonds, purchase of tokens and forecasting markets can be decentralized reversed using bitcoins.
WBTC seems to be a centralized alternative to offering atomic exchanges, which the cryptocurrency community has been developing since last year, which allows you to interact between different blockchains through programmed and decentralized exchanges between both networks. Centralized, because the storage of bitcoins, which they support, will be the responsibility of a single central authority.
Token "highly centralized"
One of the criticisms that are most widely distributed on social networks about Bitcoin Wrapped is that this service will be centralized, which was confirmed by the initiative. “This token is highly centralized because it is issued by exchange bureaus, and the BTC is protected by the organization,” they explain in one of their publications.
In addition to the fact that the token will be issued and managed by the subjects centrally, it is also important to take into account that the token will be audited DAO, whose representatives are members of firms and communities that participate in the issuance of WBTCOne would think that this organization is not as decentralized and autonomous as the cryptocurrency community would be expected.
However, for greater autonomy of this service, the DAO's authority will be removed and added to the said organization by democratic voting among its members, which will help maintain a greater balance of power among organizations that issue tokens.
In line with the lack of decentralization, Sunny Aggarwal – a researcher and developer of the Tendermint team – believes that Bitcoin storage is also a high-risk service. and that these types of tokens attached to a protected cryptocurrency may be subject to the same regulatory rules as other stable coins, as an example the token linked to the Circle Dollar (USDT) reported by users due to the possibility of censoring which their issuers have.
Recall that this peg is extremely centralized and has a very high risk of retention. It is also in the same regulatory paradigm as things like USDC. https://t.co/lirjrx5xb4
– Sunny Aggarwal (@ sunnya97) January 30, 2019
Customers purchasing WBTC should also consider that they are betting on changing their bitcoins on representative bitcoins and that they will perform operations on a network that is not as safe as bitcoins. Ethereum is a blockchain that, since its launch, suffered several bifurcations and several errors (errors). In addition, he does not have the same computing power as Bitcoin, which exposes him to possible attacks.
Among other criticisms and debates after the launch of the WBTC, highlights tweet Eric Wall, an engineer and director of Cinnober, who commented ironically on the news: "Ethereum is officially a bitcoin side chain", a score that sparked Twitter debates and equally sarcastic responses from users "Token" or "decentralized application" Ethereum.
Big day in crypto. Ethereum is now officially bitcoin sidechain. https://t.co/hIzi7SUniv
– Eric Wall (@ercwl) January 29, 2019
Other users answered that the term “side chain” cannot be used in the case of WBTC, since Ethereum is not used as a network “that verifies data from another chain”, as in the case of networks such as Liquid, BTCRelay and Lightning Network. that check Bitcoin transactions.
By definition: "A side chain is a blockchain that checks data from other blockchains."
2-way-peg is an orthogonal concept.
– Alex Mizrahi (@killerstorm) January 29, 2019
Ethereum also does not help to scale Bitcoin, one of the main functions of side chains. However, the creators of WBTC really want to take advantage of Ethereum’s full turing to allow for “greater usability” of Bitcoin, given that the programming language of this blockchain is limited. The same goal is pursued by startups such as RSK, which for several years have been working on the inclusion of intelligent contracts into the Bitcoin network through a side chain.
Selected Images florin / stock.adobe.com