Quick Guide about Wrapped Bitcoin (WBTC) and How Is It Created
Wrapped Bitcoin (WBTC) is the first ERC20 token that is backed by Bitcoin 1:1. Which enables it to completely integrate with the ecosystem of DEXs, crypto lending services, prediction markets, and other ERC-20-enabled DeFi apps.
What is Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) is the first ERC20 token that is backed by Bitcoin 1:1. $WBTC is ERC-20 compatible, which enables it to completely integrate with the ecosystem of decentralized exchanges, crypto lending services, prediction markets, and other ERC-20-enabled decentralized finance (DeFi) apps found on the Ethereum blockchain.
The Ethereum (ETH) ecosystem, which includes decentralized exchanges (DEXs) and financial apps, gains more liquidity thanks to $WBTC. Today, centralized exchanges handle the lion’s share of Bitcoin trading traffic. $WBTC alters that by enabling token trades using Bitcoin and adding Bitcoin’s liquidity to DEXs.
How Wrapped Bitcoin is being created?
A custodian, who participates in the actual creation and burning of Ethereum-based tokens, is in charge of holding all to-be-converted Bitcoin. The user can get their remaining BTC amount back from the custodian after burning $WBTC. Users who participate in mining give Bitcoin to the custodian to be stored in exchange for $WBTC tokens. BitGo, the largest Wrapped Bitcoin custodian, will mine a predetermined amount of $WBTC and transfer it to the buyer's Ethereum address.
To transfer money to the merchant, the user who wants to switch between $WBTC and $BTC executes a deal via a centralized exchange or an atomic swap on a decentralized exchange. Once everything is done, the user can spend their $BTC or $WBTC however they like. When $WBTC is converted to $BTC, a burn transaction is used to remove the associated Wrapped Bitcoin balance.
$WBTC offers full integration of a Bitcoin-like asset into this cutting-edge ecosystem of financial decentralized applications by “wrapping” $BTC in the ERC-20 standard, bringing along the enormous liquidity associated with the $BTC market.
It can be challenging to manage different nodes and transaction types in order to handle several currencies. Now, all that is required of exchanges, wallets, and payment apps is an Ethereum node.
Team
The Wrapped Tokens project, of which $WBTC is a part, was founded by three companies — BitGo, Kyber Network, and Ren — rather than by an individual.
BitGo is an institutional custodian, trader, and provider of financial services for digital assets. It was co-founded in 2013 by American computer scientist and entrepreneur Mike Belshe. In addition to being one of the creators of $WBTC, BitGo also maintains the keys necessary to manufacture new $WBTC coins and acts as the protocol’s original custodian.
An on-blockchain liquidity mechanism called Kyber Network makes it possible to integrate various cryptocurrency tokens and DeFi applications. It is headquartered in Singapore and was established in 2017 by Loi Luu, Victor Tran, and Yaron Velner. The organization that mints and burns $WBTC tokens to preserve the 1:1 ratio of tokens to $BTC reserves is Kyber Network, which, along with Ren, contributed to the creation of $WBTC and continues to be a merchant on its network.
Similar to Kyber, Ren focuses on integrating bitcoin assets and DeFi applications across blockchains via products like RenBridge, RenVM, and others. Taiyang Zhang and Loong Wang launched it in 2017.
Where to Store Wrapped Bitcoin (WBTC)
Wrapped Bitcoin (WBTC) tokens are built on the Ethereum network and can be stored in any wallet compatible with Ethereum-based ERC-20 tokens. Options to keep your Wrapped Bitcoin (WBTC) secure and offline can therefore include the leading hardware wallet providers Ledger and Trezor. All ERC-20 tokens, including Wrapped Bitcoin (WBTC) can be stored on the Ethereum blockchain using MyEtherWallet, allowing users to interact with the network without additional software.
An alternative wallet provider for Bitcoin (WBTC) token holders can be Trust Wallet, a multi-currency mobile wallet that enables users to simultaneously store a variety of digital assets in one place. Popular among traders and gamers, the beginner-friendly mobile wallet may be appropriate for users looking for a convenient and accessible app, with trusted security and backup options.
Similarly, a user-friendly option to keep your $WBTC secure can include MetaMask, a leading browser wallet extension popular among DeFi platforms and highly praised by developers. Users can integrate with the network’s Liquidity Mining pools by connecting their MetaMask wallet.
Where to Buy and Sell Wrapped Bitcoin (WBTC)
You can Buy & Sell Wrapped Bitcoin (WBTC) by heading over to the Buy Coins page of our website. Wrapped Bitcoin (WBTC) is available on BC Bitcoin trading against major fiat currencies: GBP and EUR. Buying $WBTC has never been easier, simply place your order and provide your wallet address. Once your payment arrives, Wrapped Bitcoin (WBTC) will be sent directly to your wallet.
If you choose to Sell Wrapped Bitcoin (WBTC) you can send us the coins and receive a payment to your bank account. Details and valuation can be found on our Sell Coins page.
Wrapped Bitcoin (WBTC) Resources
Website: https://wbtc.network/
Block Explorer: https://etherscan.io/token/
Twitter: https://twitter.com/WrappedBTC
Disclaimer: The information provided in this article is intended for informational purposes only. It is the readers' responsibility to complete their own research and due diligence.
