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Bitcoin on the Ethereum Blockchain possible from 2019

Bitcoin on the Ethereum Blockchain possible from 2019

The currency abbreviations BTC (Bitcoin), BCH (Bitcoin Cash) and ETH (Ethereum) are well known to many. But what does “WBTC” mean? WBTC is the abbreviation for Wrapped Bitcoin. This refers to a new token on the Ethereum Blockchain, which is directly linked to the value of Bitcoin. Based on a joint project by Kyber Network, Republic Protocol and BitGo.

This WBTC token is intended to fulfill two essential functions. Firstly, it should enable Bitcoin to participate natively in Ethereum Blockchain's Smart Contracts. In the past, there have been several attempts to build Smart Contracts on Bitcoin's own blockchain. These include QTUM, which runs Ethereum's virtual machine on the Bitcoin network. Rootstock has tried to do that by mirroring the functions of Ethereum on Bitcoin. Nevertheless, Ethereum has always remained the leading platform for smart contracts. This is true even though the development in the field of dApp has not been very promising lately.

The second function of WBTC is to let Bitcoin directly affect the value of the token on the Ethereum Blockchain. The reserves of Kyber and the other parties support the tokens. In addition, transparency initiatives are underway to help investors understand what they think. Accordingly, holding a wrapped bitcoin (WBTC) has the equivalent of one bitcoin (BTC).

On medium, Kyber Network explains in a blog post:

“Initially, Kyber will provide the initial liquidity of the WBTC tokens through our reserves. This allows you to swap the token, like any other supported ERC20 token on our protocol. To start we will, together with Republic Protocol, act as a first sales. This provides a platform for verified users, where they can swap arbitrarily small or large amounts of Bitcoin for Wrapped Bitcoin. “

The purpose of the project is apparently the seamless transition between Bitcoin and Ethereum. So if someone keeps Bitcoin, they can simply transfer them to the Ethereum Network as WBTC tokens. After that, he can easily convert the tokens back to Bitcoin at any time. It is not necessary to go through a centralized crypto-exchange if you belong to the Kyber Network or one of its partners. Kyber himself expects great growth. So it says:

“The current form of WBTC is only the first step towards an ideal, decentralized solution. It's important for the community to work together for a more innovative, interoperable environment. “

Several crypto exchanges have already announced to note the WBTC token. An interesting question for traders is whether there will be arbitrage between Bitcoin and Wrapped Bitcoin. This is currently unknown, but it also seems possible that the course of Wrapped Bitcoin will always be adjusted exactly to the course of Bitcoin.

Bitcoin on the Ethereum Blockchain possible from 2019

Sources: SFOX, Medium, Pixabay

Author: Peter Joost – Source Post: https://www.kryptovergleich.org/bitcoin-auf-der-ethere-blockchain-mglichlich-ab-2019/

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