Topic: Bitcoin and it’s Wrapped versions (Read 212 times)

FWIW, Bitcoin sidechain also exists. So you can use DeFi without totally leaving Bitcoin ecosystem/network.


Coinbase simply kick it's competitor. But IMO it's too early, when they could lose trading money/fee for users who prefer wBTC.

Tokenized versions of Bitcoin are useful for people that want to earn yield from their holdings but don’t want to exchange their BTC for ETH or BNB. tBTC holds the least risk out of all these wrapped versions because it is decentralized. Price depegs might occur but the deviation is usually not that significant, similar to Tether and USD, for the most reputable Bitcoin wrappers.

Wrapped bitcoins are simply tokens and to me I really don't see the point buying them. It's simply the same as buying the amount of tokens on that network equivalent to bitcoin at that time. In my opinion , I kinda see them as fake bitcoins because the catch is if you really want to hold or own some bitcoins, I see nothing wrong in buying real bitcoins on the real network.

I've come across a couple of wrapped BTC versions on different networks with the most common one I've seen is on the Ethereum network. The concept is quite simple what they do is pegged the tokens price to bitcoin. Imagine buying bitcoin on a centrallised network!

Sure they are much worse than real Bitcoin because they are printed from nothing and they are sometimes on centralized blockchains like binance chain.
Not only peg can be lost but they can literally go to zero value very quickly if binance (or some other company) gets shut down for some reason.

Wrapped Bitcoins are not bitcoins and they are even not coins, in fact they're tokens.

You have double risks or even more than double risks with these tokens. If they are altcoins with as native currencies of their blockchains like Ethereum, BNB, Solana, it's still risky, a first layer of risk.

If they're tokens, you have a second layer of risk. You can imagine that if anything wrong with that token, it will depeg and you will lose your money. Wrong things can come from that token itself or from a native currency of a blockchain on which that Wrapped Bitcoin token is deployed. Do you think all tokens on Ethereum blockchain will be fine if Ethereum blockchain has big problems.

Definition of tokens.

A stablecoin is an altcoin that is supposed to have a fixed price against usually some fiat. For example 1 Tether (USDT) is supposed to always be worth 1 US dollar.
Bitcoin is money and it has its own value and its price is volatile against fiat currencies.

Not able to?
You say it as if the token scam field is a good thing to enter! As I said Bitcoin is money and a payment system and not a token creation platform. Bitcoin must not enter the scam world of DeFi and other token related crap.

Wrong.
You can not and are not "accessing bitcoin on ethereum" when you use a wrapped token there. You are using an IOU that has nothing to do with bitcoin but they promise you that they will honor their 1:1 swap ratio.

The only "opportunity" DeFi and generally speaking tokens provide is for people to raise money by creating and selling something completely useless to any newbie or gambler who is willing to throw away their money.

In my opinion, these wrapped tokens are worse than Bitcoin forks. Because they have pegs to Bitcoin price but pegs can be lost, can depeg and these Bitcoin Wrapped Tokens give people unrealistic safe belief that their capital will be safe by storing it in these wrapped tokens.

It's different than Bitcoin forks, which are purely altcoins and people are free to expect price growth of these altcoins, but they don't have unrealistic belief on any guarantee from peg price to Bitcoin price. Storing money in Bitcoin Wrapped Tokens is like sleeping in a time-bomb nightmare that can be activated anytime.

Why Wrapped Bitcoin can depeg?

All those wrapped tokens are not real Bitcoin, they are mostly crap and I would not trust any of them or hold them long term in my portfolio.
Wbtc is owned by BitGo that made changes in bad direction in last few months, so it is not true that they are ''miles ahead'' like you say.
Only alternative for Bitcoin I would consider temporary is L-BTC, that is confidential Liquid Network that can be swapped back to Bitcoin mainnet easily.

Looks like its  dominance over other wrapped bitcoin tokens will end soon as Coinbase is going to delist wBTC in the coming month  ^{(trading will be suspended on December 19,2024)} and instead launch their own token namely cbBTC. They do it because of  believe that Justin Sun has too much influence over the relevant protocol ^{( I support this view)}.

These Wrapped Bitcoin are not Bitcoin forks. Bitcoin forks are kinds of altcoin with copy source code from Bitcoin, but they are low value altcoins. These Bitcoin forks are not the same as Wrapped Bitcoin tokens, they are on their own blockchains, Proof of Work and are not parasites on any altcoin blockchains like Ethereum, Binance Smart Chain, Solana, and more.

How many Bitcoin forks are there?

Wrapped bitcoin is not a delusion, that you don’t use it or have fear of altcoins doesn’t make it useless or worthless. It was made for people who needs it in spaces where bitcoin can’t access. WBTC has been around for 5years and it’s still active. Though it’s an alternate version of bitcoin it has it’s risks and merits, choose what you can handle.

Wrapped Bitcoin isn't Bitcoin but an Altcoin, and I believe I would personally avoid such wrapped ones even if someone gives me 100% confidence that they are safe. Someone who knows Bitcoin pretty well would always avoid that wrapped Bitcoin.

Some folks copy bitcoin code and create a delusion that there is an area in the crypto space that bitcoin in its original form can work hence they figured out a solution to a none existing problem and called it whatever you call it.

I only know one Bitcoin and it's the bitcoin that has been around for over 15 years now.

Bitcoin --- Satoshi

Wrapped bitcoin ---- organizations - bitgo, kyber network, Ren (republic protocol)
 

Bitcoin is Bitcoin and 1 bitcoin is 1 bitcoin. Depends on price of Bitcoin, you will have it with your 1 bitcoin BTC.

Wrapped Bitcoin are altcoin projects, and they are tokens. They're not other versions of Bitcoin, you must know this big hidden fact. Bitcoin does not need any other version on altcoin blockchains.

These altcoin developers try to create these Wrapped tokens, and convince people that those tokens are versions of bitcoin while they are not.

Wrapped Bitcoin tokens can lose their pegs to bitcoin price. 1 Wrapped bitcoin can depeg and has value as $0 even 1 bitcoin BTC is valued at $90,000.

Introduction
Bitcoin is the world no.1 Cryptocurrency, it’s the largest by market capitalisation, most famous and traded stable coin with all the advantages that it brings it’s not able to enter into the world of DeFi and it’s applications, That’s where Wrapped bitcoin comes in.

Most people may have heard of wrapped tokens but don’t fully know what it is.
Lemme explain that before we talk about wrapped bitcoins: We know both Bitcoin and Ethereum have different functions and protocols and operate on different blockchains, there’s no way bitcoin can be used on an ethereum blockchain. So in order for you to access bitcoin on ethereum blockchain it is wrapped (as a form of disguise lol).
So Wrapped tokens are cryptocurrencies that have their values/price attached to another crypto, which can be used to bridge gap between blockchains or networks and create interaction in the crypto space(interoperability). They’re usually managed by a third party/ custodian who wraps and unwraps the assets.

Wrapped Bitcoin:
The Process of Wrapping involves three parties ;
1. The Merchant who triggers the process by sending BTC to the custodian after receiving a request from the user
2. The Custodian who holds and locks the BTC and ensures it’s secure.
3. The User who makes the request to use BTC in DeFi.
Any User who’s interested in wrapping their BTC first deposits BTC and makes a request to the merchant who transfers the exact deposited BTC to the custodian’s address. The Custodian locks the BTC and an equivalent WBTC is minted on ethereum. If you want your BTC back u just have to burn the WBTC and your BTC is released back to you.

There are about five versions of wrapped bitcoin
1. WBTC: The first version of wrapped bitcoin to be launched in January 2019 by BitGo, and still the most used. It is an ERC-20 token designed to represent bitcoin in the ethereum blockchain maintained by an organisation of over 30 members WBTC DAO. It has helped BTC holders to participate in the ethereum DeFi ecosystem with lots of opportunities. It is valued at 1:1 with BTC. Fully transparent with proof of reserves across chains

2. tBTC: This one has no custodians, it is a decentralised Bitcoin to Ethereum bridge that requires no one to hold custody of the BTC. It is valued at 1:1 on the threshold network. The bridge is also transparent and has up to date proof of reserve.

3. sBTC: This one is a synthetic bitcoin token that tracks the price of BTC through oracles instead of reserve on the synthetix  ecosystem. But recently it has proven to be more than just the synthetic platforms

4. cbBTC: Recently launched on September 2024 is the Coinbase wrapped bitcoin token that allows users to use BTC on the Ethereum and Base network. The Custody is solely managed by Coinbase unlike WBTC.

5. renBTC: which was launched by the ren protocol but a suffered a great loss due to the bankruptcy of its owner in 2021. It was shut down in late 2022 but allowed users to bridge their assets back to BTC before shutdown to avoid losses.

Conclusion:
Bitcoin has made it’s mark on the cryptocurrency world, overtime it has proven to be profitable, dependable and sustainable with many multinational institutions owning it and many businesses accepting it as payment.

As the need for the use of bitcoin keeps rising and the numerous opportunities DeFi provides, Wrapped bitcoin becomes more and more important.

Finally in the quest for the best wrapped Bitcoin, WBTC is miles ahead of others on all fronts;- liquidity, transparency, and decentralization.




Read more on Bitcoin.com

https://www.bitcoin.com/get-started/what-are-the-different-types-of-wrapped-bitcoin/#:~:text=Wrapped%20Bitcoin%20refers%20to%20tokenized,ecosystems%2C%20primarily%20for%20DeFi%20applications.