A group of cryptocurrency startups present a "wrapped Bitcoin." The group introduced a token that will be created on Ethereum Blockchain and linked to the value of Bitcoin.
29 October 2018 – Kyber Network, BitGo, and Republic Protocol have reportedly joined their efforts to create the WBTC, a “wrapped Bitcoin.” This innovative token will be designed on the Ethereum Blockchain and tied directly to the value of Bitcoin.
How Will WBTC Influence Cryptocurrency?
The WBTC will combine two significant effects on cryptocurrency.
Firstly, it will allow Bitcoin to participate in Ethereum smart contracts directly on the Ethereum Blockchain. Multiple efforts to initiate smart contracts smart contracts on Bitcoin’s Blockchain have been undertaken. However, despite that, Ethereum remains the primary mode in terms of smart contracts.
Nevertheless, the chances of Ethereum decentralized applications have caused doubts in the market.
Secondly, the WBTC will allow the value of Bitcoin to directly impact a token on the Ethereum Blockchain. The tokens will be backed by the reserves of BitGo and other project’s participants. It is understood that other initiatives to ensure that investors are clear about what they are holding are in place. If one holds 1 WBTC, one has an equivalent value of 1 BTC.
What is the goal of WBTC?
Kyber network has written in its blog:
“First off, Kyber will provide initial liquidity for WBTC tokens through our reserve, so that it can be exchanged like any other supported ERC20 token on our protocol. At launch, together with Republic Protocol, we will serve as initial merchants to provide a platform for KYC’d users to atomically swap between BTC and WBTC tokens.”
The key goal of the project is to facilitate an easy transition between Ethereum and Bitcoin. In case someone is already holding Bitcoin, he can get it onto the Ethereum network as a WBTC token. It is also possible to further cash out at any time back to Bitcoin.
The deployment of a centralized exchange will not be necessary in case one is equipped with Kyber Network or any other project participants. Kyber expects a wide expansion of the project in the near future.
Kyber Network further writes:
“The current iteration of WBTC is just the first step of the journey to an ideal decentralized solution, and it is important for the community to work together towards a more innovative, interoperable ecosystem.”
A number of exchanges have already stated that they intend to list the token.
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