What is it?

Wrapped Bitcoin (WBTC) is an ERC20-token which aims to bring the liquidity of the Bitcoin blockchain to the Ethereum Blockchain.

In plain English this means “introducing Bitcoin to the Ethereum blockchain”.

This is done by keeping a reserve of Bitcoin in a trust-account. In order to achieve high transparency, the amount of WBTC in circulation is made known with proof that Bitcoin, which backs this stablecoin, is being held in safe custody (by BitGo.com ).

Wrapped Bitcoin (WBTC) is backed on a 1:1 basis with Bitcoin (held in the aforementioned custody).

The reason of this is to introduce, and make available, Bitcoin for DeFi (Decentralized Finance)-applications. Many of the DeFi-applications take place on the Ethereum blockchain and are not available elsewhere. By wrapping coins and introducing as ERC20-tokens are they being made available on the Ethereum blockchain. In the case of WBTC, this implies a bridge has been formed connecting the Ethereum Blockchain with the Bitcoin Blockchain.

Opinion and analysis:

DeFi is upcoming and decisive for the future of the Cryptomarkets. DeFi enables the introduction of special financial services to the Cryptocurrency market.

Think of services like:

• Loans
• Saving (interest)
• Lending
• and more…

In the following video we give an introduction to the services and possibilities (as well as “what”) DeFi brings.

Investing in Wrapped Bitcoin is a smart move when you want to save wealth on the Ethereum Network.

Words of caution still needs to be given though.
The safest cryptocurrency project is still on with as much distribution and decentralization as possible. The purpose in DeFi is to TRUSTLESS.

Where it concerns wBTC does it need highlighting that the 1:1 peg requires a trusted custodial party. This means a centralized point of failure IS present. Highlighted is “trusted” as well which stands in stark contrast to being trustless (i.e. not requiring trust for safety and/or functioning).

The greatest value is still to be found in Bitcoin itself. Investing and keeping bitcoin is still preferred. Wrapped Bitcoin, due to its bridge to the Ethereum blockchain and possibility for DeFi application, can be a good choice if you want to trade swap value on a different network into Bitcoin. The best choice is to sell your altcoins and get the real deal (Bitcoin). wBTC is only a good intermediary if you want to go fully decentralized while remaining on the Ethereum Network solely.

For more information check out the following websites:

Official website: https://wbtc.network/
Official whitepaper.: https://wbtc.network/assets/wrapped-tokens-whitepaper.pdf
Marketcap: https://coinmarketcap.com/currencies/wrapped-bitcoin/

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