Bitcoins tokenized faster than they are being mined

LoyceV

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Quote from: kryptqnick on August 16, 2020, 07:15:56 AM

Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process

It's dumb! And it just sounds like the next scheme in the line of altcoin>ICO>Fork>defi/tokens. Why would anyone give up their own Bitcoin to buy a token created out of thin air, only because they promise to keep the Bitcoin? There used to be a time when dollars were backed by gold. Until someone decided to remove that promise.

Quote from: hatshepsut93 on August 16, 2020, 01:37:00 PM

Why would anyone want to hodl an IOU for Bitcoin?

Asking the real questions here!
All altcoins, ICOs, Forkcoins and now this crap are only created to make the creator rich. Don't surrender your Bitcoins, if you don't own the keys, you don't own them. Period.

You call it tokenization. I'm going to call it forgery. Or counterfeiting. Or just an exit scam waiting to happen.

serjent05

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Quote from: GreatArkansas on August 16, 2020, 05:41:08 PM

I have never tried to use WBTC/wrapped BTC?
But the concept of it especially using the ERC20 under ethereum network is good, this can be reduced that traffic on Bitcoin network.
The only downside of it for me is being the non-transparent of it or some issue regarding the issuing of wrap BTC, like some hacks could happen or if the Ethereum network will fall, WBTC could be also affected since it is ERC20 and under on Ethereum network.

Anything regarding Bitcoin that does not run in the Bitcoin chain is not good. It is misleading just like the way OP stated on its first post. It is manipulated and centralized. And anything that are centralized is vulnerable to corruption. Anytime the project owner can run the fund that is backing that WBTC. Why use something that pretends to be a BTC when we can use BTC directly and free of any hassle and risk.

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WBTC being created more than the Bitcoins themselves does prove that people are using them more in the market , maybe for the smart contracts and other options that ERC20 does have to offer , not like BTC does not have that but it's harder ..

This only means that the project owner is up for the money grab. It is not that more people are using it.

witcher_sense

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Quote from: fiulpro on August 16, 2020, 07:08:04 AM

~
First thing , it's not Bitcoins but at the end of the day , it's supported by Bitcoins , it's backed by Bitcoins this does mean Bitcoins and ERC20 tokens have integrated themselves in a much mutualistic way . This does mean they are supporting each other and we should expect people to get involved with WBTC more.

It's been expected to be a first class asset in some years .

What are your views ?
Have you ever owned and used WBTC?

Have never used Wrapped BTC and not going to, because I don't trust "something backed by something valuable" narratives. As we can see in this specific case, your statement is not true, because the quantity of WBTC is more than the quantity of BTC. So it is not actually backed, we just have been told it was supposed to be. The problem with shitcoin assets backed by bitcoin is that they require trust to whoever else issued them. They require continuous audit from third parties, again. With bitcoin I need not to trust anyone, I run my full node and verify everything for youself, without having to rely on third party auditors.

tranthidung

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Quote from: GreatArkansas on August 16, 2020, 05:41:08 PM

I have never tried to use WBTC/wrapped BTC?
But the concept of it especially using the ERC20 under ethereum network is good, this can be reduced that traffic on Bitcoin network.
The only downside of it for me is being the non-transparent of it or some issue regarding the issuing of wrap BTC, like some hacks could happen or if the Ethereum network will fall, WBTC could be also affected since it is ERC20 and under on Ethereum network.

They are a kind of fake BTC. Fake from the name, ticker, and fake from technology.

Developers of such projects only try to borrow the word Bitcoin and the ticker BTC to more easily grow their projects. I considered them as fake derivatives and they are different from USDT on Bitcoin chain, or USDT on ERC20/ TRC20. In my opinion, USDT on ERC20/ TRC20 is better than WBTC.
Ethereum network has its own problems that have been repeatedly shown from CryptoKitties or DeFi. So the WBTC won't solve all technical problems at all times.
How Many Bitcoin Forks Are There? You will be surprised!!!. They think they can more easily get success than create other bitcoin forks.

davis196

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Tokenization was a thing back in 2017,when Bitcoin price was going to the moon,now the crypto market is slightly bullish and tokenization became trendy again. Grin

When you see the word "token" in the whitepaper of any cryptocurrency startup project,just run away immediately. Grin

I don't trust "assets",which are backed by other assets.If a financial asset has real value,there's no need for such "backing".The market decides whether or not some financial asset has value.

leea-1334

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I am not sure I get what this means though, if people are buying tokens at ICOs,,, pooya above me is absolutely right. Are they not just buying tokens and not tokenizing their Bitcoin? I mean, I get it if I am putting my Bitcoin in an escrow to mine tokens maybe, sure, but if I buy something I am not turning my money into the thing I buy, I am exchanging it. Do you not think this is a bit misleading?

pooya87

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this is misleading as it has absolutely nothing to do with bitcoin and bitcoin is NOT being tokenized. your initial statement explaining "Tokenization" doesn't help either.
you see it is a free market and anybody can create an altcoin or a token on another platform and call it whatever they want and link it to whatever they want. and so far they have done this hundreds of times.

in simple terms WBTC is nothing more than another useless ethereum token and is the exact same scam as ICOs, IEOs, STOs, .... they just keep changing the name (currently called DeFi) and pull the same scam all over again.

Quote from: DougM on August 16, 2020, 06:53:23 PM

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Onchain analytics show the number of bitcoin (BTC) held on the Ethereum blockchain

this is wrong. there is no "bitcoin" held on any other chain because it makes no sense.
they can create any shitcoin they want and call it "bitcoin" or "bitcoin something" but that doesn't make it bitcoin. nor does it make any kind of connection between the two.

OcTradism

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Because the confidence and believe in USDT decreased from their unclear financial reports, people lost their faith in USDT. Consequently, those companies try to use Bitcoin as collateral or as backed asset for their company trust. It is their strategies to build up their trust fastly. Bitcoin does not relate to them like past scam projects. They scam and people blamed on Bitcoin. Bitcoin is a scam. No it is not and never been a scam. Only projects or people use Bitcoin as a tool for their companies are scam and scammers.

DougM

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Another related article:

https://news.bitcoin.com/onchain-data-shows-449m-worth-of-bitcoin-on-eth-eclipses-offchain-competitors/

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Onchain analytics show the number of bitcoin (BTC) held on the Ethereum blockchain has been multiplying at an extremely fast rate since the end of May. On Sunday, August 16 there’s approximately 38,021 BTC on Ethereum or roughly $449 million stored in synthetic bitcoin protocols like Wbtc, Renbtc, Sbtc, and more.

The Wrapped Bitcoin (Wbtc) project has the most BTC locked into the system with 26,161 coins ($310M) in the framework.

Wbtc is by far the most popular synthetic bitcoin (BTC) on the market today. This is followed by Renbtc (7,721), Sbtc (1,793), Hbtc (1,310), Imbtc (988), Pbtc (48)

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“Bitcoin is now an undeniable part of [decentralized finance] defi, with $420M USD of BTC on Ethereum, in one form or another,” the CTO at Ren Protocol told his 2,778 Twitter followers on Saturday. “In the last 24 hours, over $24M has been moved through Ren Protocol to be used to farm yield. Anyone not generating APY right now with their BTC is asleep.”

Velkro

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Quote from: fiulpro on August 16, 2020, 07:08:04 AM

What is Tokenization?
In simple words token can represent a Tradable and Transferrable value that is acceptable and interchangeable. For example one token might mean 10 BTC , or maybe 15 BTC , so when you exchange the token or use it , you are entitled to use them.
There are many ICO's that also gives tokens to the participants, concept is same.

IMG OF SHITCOIN here

Have you ever owned and used WBTC?

Well another shiningans to promote some shitcoin.
If you are reading something and its hard to understand what author wanted to say, its a scam indication or in this example promoting shitcoin.

Dont fall for it, comparing something without value to Bitcoin because fancy words doesnt mean its real.
Stay away from altcoins = shitcoins because too many people got burn already.

Yes of course this time will be different, like communism someday will work (yeah Wink

)

hatshepsut93

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Quote from: DougM on August 16, 2020, 04:44:56 PM

I completely agree yet there is not only a product, but also a demand for the product. Can anyone explain the actual appeal?

There is demand because there's a lot of hype around DeFi, DAO, tokens and Ethereum ecosystem in general. Probably the most interesting use-case is lending - you can put your wrapper Bitcoin in a decentralized fund that will yield returns over time. But this too comes with a pretty big risk, because these funds are prone to hacking or just losing money due to certain trades. I'm staying away from this DeFi stuff, no matter how lucrative it looks.

GreatArkansas

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I have never tried to use WBTC/wrapped BTC?
But the concept of it especially using the ERC20 under ethereum network is good, this can be reduced that traffic on Bitcoin network.
The only downside of it for me is being the non-transparent of it or some issue regarding the issuing of wrap BTC, like some hacks could happen or if the Ethereum network will fall, WBTC could be also affected since it is ERC20 and under on Ethereum network.

DougM

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Quote from: hatshepsut93 on August 16, 2020, 01:37:00 PM

Why would anyone want to hodl an IOU for Bitcoin? It's a huge risk becaise there's so much that can go wrong here - hacks, bugs and other platform failures, and there's really no benefits here. Ethereum network fees are as high as Bitcoin's, so you won't save any money here. And merchant adoption of this Bitcoin token is nearly non-existent, so you'll find it very hard to actually spend. Lightning is a solution to transaction problems that doesn't have any of these drawbacks.

I completely agree yet there is not only a product, but also a demand for the product. Can anyone explain the actual appeal?

hatshepsut93

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Why would anyone want to hodl an IOU for Bitcoin? It's a huge risk becaise there's so much that can go wrong here - hacks, bugs and other platform failures, and there's really no benefits here. Ethereum network fees are as high as Bitcoin's, so you won't save any money here. And merchant adoption of this Bitcoin token is nearly non-existent, so you'll find it very hard to actually spend. Lightning is a solution to transaction problems that doesn't have any of these drawbacks.

DougM

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Quote from: Fundamentals Of on August 16, 2020, 09:02:52 AM

Quote from: DougM on August 16, 2020, 07:37:10 AM

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

This may have a good effect as this is not Bitcoin itself and therefore it may be faster and cheaper to make transactions with it. This is not so bad at all. If this trend continues and is received well by the crypto community, it might make Bitcoin just a reserve currency which backs certain tokens such as WBTC 1:1.

But the problem is that it may exceed the 1:1 backing of real Bitcoin. If a Bitcoin token is minted without the proper backing of a real Bitcoin, it might become just like fiat which is printed out of thin air, or USDT without a real USD behind it.

Interesting, I didn't consider the transaction aspect. Would it have any liquidity impact that could increase the demand for 'raw' BTCs? I guess technically the demand might be offset by the wrapped bitcoin via Ethereum ecosystem but it also makes more BTC virtually available to a wider customer base which should have a net effect of increasing demand right?

DougM

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Quote from: joniboini on August 16, 2020, 10:00:42 AM

I'm not following the whole process of minting the tokens but shouldn't there a process where the user that wants to mint WBTC have to send some bitcoins to some address? If that doesn't exist then the whole pegged token is dubious. If that process is indeed present, then I don't see why this this tokenization must be slower than the number of mined bitcoin per day. After all, anyone can just buy from the market, lock it and then get the pegged version in return.

https://wbtc.network/assets/wrapped-tokens-whitepaper.pdf

From the white paper the bitcoins are transferred from the merchant/customer to the 'custodian' who then mints a WBTC via a wrapped token contract.

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Sequence of events for users to receive WBTC tokens
● User requests wrapped tokens from a merchant
● The merchant does the required AML, KYC procedures and gets identification information from the user
● The user and merchant perform an atomic swap, or use a trusted exchange with the merchant receiving Bitcoin and the user receiving WBTC

It can also be 'burned' to unmint and release the original BTC.

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Sequence of events for burning WBTC tokens
● The merchant creates a burn transaction, burning X WBTC tokens
● Custodian waits for 25 block confirmations of the ETH transaction
● Custodian releases X BTC to the merchants Bitcoin address
● Custodian makes an ethereum transaction marking the burn request as completed

joniboini

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I'm not following the whole process of minting the tokens but shouldn't there a process where the user that wants to mint WBTC have to send some bitcoins to some address? If that doesn't exist then the whole pegged token is dubious. If that process is indeed present, then I don't see why this this tokenization must be slower than the number of mined bitcoin per day. After all, anyone can just buy from the market, lock it and then get the pegged version in return.

Fundamentals Of

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Quote from: DougM on August 16, 2020, 07:37:10 AM

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

This may have a good effect as this is not Bitcoin itself and therefore it may be faster and cheaper to make transactions with it. This is not so bad at all. If this trend continues and is received well by the crypto community, it might make Bitcoin just a reserve currency which backs certain tokens such as WBTC 1:1.

But the problem is that it may exceed the 1:1 backing of real Bitcoin. If a Bitcoin token is minted without the proper backing of a real Bitcoin, it might become just like fiat which is printed out of thin air, or USDT without a real USD behind it.

fiulpro

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Quote from: DougM on August 16, 2020, 07:37:10 AM

Quote from: fiulpro on August 16, 2020, 07:08:04 AM

According to the reports the Bitcoins are tokenized faster than they are being Mined .
....
What are your views ?
Have you ever owned and used WBTC?

OMG how funny I just posted the same article and similar questions just minutes after you did! I tried to delete mine, but I can't Cry

Maybe the moderators can delete it so we can consolidate this topic under your thread. I have very similar questions, but I will add them here to build on your thread:

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

Oh am really sorry , you should not delete the question , keep it there , for the while you can watch this thread with me , it happens sometimes 😅 , sorry I was writing it for a while therefore should have again checked before posting.

Thank you for being so considerate.

Quote from: GeorgeJohn on August 16, 2020, 07:35:51 AM

Quote from: kryptqnick on August 16, 2020, 07:15:56 AM

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

Bro,I want to really know how bitcoin token operates because i don't really know if their is any difference between bitcoin token and ETH token.

It's nothing but BTC backed ERC20 , more like amount of ERC20 that will add up to 1 BTC being coupled together so that you can sell/buy very fast.

Quote from: kryptqnick on August 16, 2020, 07:15:56 AM

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

I do think for the future they might go into a mutualistic part since this time they are not completing they are helping each other and that's a fairly good thing , for the long run I do believe we will see many more tokens like this , since many of the ATH are dependent on BTC , with some you can only actually buy them using BTC itself.

Dump would mean bad for both and vice versa.

20kevin20

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I have actually considered doing this a while ago, but I gave up the thought. As far as I can tell, it's a centralized token.. right? What I was willing to do is transform my BTC into WBTC so that I could use it on decentralized ETH exchanges with other tokens to take in profits without having to worry about KYC and other stuff. I suspect other people have done the same - it's more convenient than having to be on two blockchains, I guess. Otherwise, I see no reason to use WBTC. Like, why use a "BTC replica" when you could use the real one instead?

Topic: Bitcoins tokenized faster than they are being mined (Read 291 times)