WBTC or also known as Wrapped bitcoin, The bitcoins supported ERC20 token is included in Ethereum's main network since January 29th for its commercial exchange.
The information was widespread in the social networks by Staked, confirming not only the launch of the new token, but also the amount of funds issued yesterday. Through the WBTC, now in Ethereum there are 65,421 BTCs, which can be used in intelligent decentralized exchange agreements, prediction markets and decentralized loans, among others.
Wrapped Bitcoin (WBTC) is now live!
There are now 65,4217 BTCs represented on the Eterum Blocks.
– Glass (@staked_us) January 29, 2019
If this figure is correct, Ethereum would have a larger percentage of bitcoins represented in their network than those currently in existence Bitcoin's side chain, Liquid. According to data on the liquid horse, this block currently has a total of 53.32 BTC represented in its network, ie approximately 12.10 BTC less than those presented in Ethereum via WBTC.
If https://t.co/xAbNgsjy2i is correct, this means that there is already more BTC present in Ethereum than it has on the very balidoid fluid sidechain pic.twitter.com/u8yZ0N8o6Y
– Adam Tiri Finch (@atyreefinch) January 30, 2019
The WBTC Token is an initiative led by BitGo Cryptoactive Guardian Guardian, as well as the decentralized exchange of homes on the Cyber Network and the Republican Protocol. The launch of this new token was announced in October 2018 with a press release explaining that the Wrapped Bitcoin (WBTC) is an ERC20-supported battles with a representative part of 1: 1, The main purpose of this initiative is to combine the liquidity of Bitcoin and the programming language Ethereum.
WBTC is marked representation in Ethereum of stored bitcoins. Users wishing to acquire Bitcoin Wrapped go into the exchange of kitchen networks and a republican protocol that owns and distributes this sign ERC20, exchanging its bangs for this sign. In this way, the battles that are delivered in the casas de cambo are delivered to BitGo for storage, a company that holds it in a multiform wallet and delivers the WBTC in exchange.
All operations of this sign will be registered in the Ethereum network. The management will be carried out by an autonomous and decentralized organization (DAO) composed of representatives of MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Protocol Protocol, Prycto, Cyber 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 the two networks. In this way, decentralized exchange houses that make life at 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 houses around the world – such as the Binancis, Coinbase and Bitfinex-, incorporating it representative with the help of an ankle token.
"Today, most of the volume of transactions takes place with bitcoins in centralized exchange houses. The WBTC changes that, bringing the Bitcoin liquidity to DEX (decentralized exchange) and allowing Bitcoin to be used for symbolic transactions, "the statement said.
Another feature that WBTC offers, according to its creators, is that this ERC20 token will allow Bitcoin users to use Ethereum smart deals, so that loan, bonds, markup and prediction markets can be canceled, in a decentralized way, with Bitcoin.
The WBTC seems to be a centralized alternative to the atomic exchange proposal that the community's cryptowearability has been developing since last year, which allows interaction between different blockbusters through programmed and decentralized exchanges between the two networks. Centralized because the guardianship of the battles they support will be the responsibility of a central authority.
The sign "highly centralized"
One of the criticisms most circulating about social networks for Bitcoin is wrapped up by the fact that this service will be centralized, a feature that is confirmed by the initiative. "This sign is highly centralized because it issues exchange bureaus and BTCs are kept by an entity," one of its publications explains.
Apart from the fact that the token will be issued and managed by entities in a centralized way, it is also important to take into account that the audit of this symbol will be executed by DAO whose representatives are members of companies and communities participating in the WBTC release. It can be thought that this organization is not decentralized and autonomous as you would expect a crypto-community.
However, for greater autonomy of this service, DAO's authorities will be removed and added to that organization through democratic voices made among its members, in that they can maintain a greater balance of power among token-issuing entities.
In accordance with the lack of decentralization, Song Aggharwal – a researcher and developer of the tendering team – believes that guardianship of battles is also a high-risk service and that these types of tokens secured to encrypted security can be subject to the same regulatory policies as other stable quotes, mentioning as an example a token delayed on the dollar circle (USDT), reported by users because of the possibility of censorship have their publishers.
A reminder that this wedge is extremely centralized and has a very high risk of guardianship. Also, in the same regulatory paradigm as working as USDC. https://t.co/lirjrx5xb4
– Sun Aggarwal (@ sunnya97) January 30, 2019
Customers who buy WBTC also need to consider that they are betting to change their bitcoins to representative bitcoins and that they will conduct network operations that are not as secure as Bitcoin. Ethereum is a blockchain that since its launch has undergone several bifurcations and several bugs (errors). In addition, it does not have the same processing power as Bitcoin, which exposes it to possible attacks.
Among other criticisms and debates following the launch of the WBTC, he notes tweet by Eric Wool, engineer and director of Cinnober, who ironically commented on the news: "Ethereum officially is the Bitcoin side chain," an estimate that generates debates on Twitter and equally sarcastic responses from users who think bitcoin has become "A token" or "decentralized application" of Ethereum.
A great day in crypto. Eterum is now officially a Bitkein Cingein. https://t.co/hIzi7SUniv
– Eric Wol (@ercwl) January 29, 2019
Other users responded that the term "side chain" can not be applied in the WBTC case, since Ethereum is not used as a network that "confirms data from another chain," as is the case with networks such as Liquid, BTCRelay and Lightning Network that confirm the transactions with Bitcoin.
By definition: "Sidechain is a blockchain that validates data from other blocs."
The two-way connector is an orthogonal concept.
– Alex Mizrahi (@ killerstorm) January 29, 2019
Ethereum will also not help scaling Bitcoin, one of the main functions of the side chains. However, the WBTC makers want to take advantage of the full Ethereum turing to make Bitcoin "more usable", as the blockchain's programming language is limited. This same goal is being pursued by startups like the RCC, which have been working on the side chain for incorporating smart deals into the Bitcoin network for several years now.
Selected image from florin / stock.adobe.com