Topic: What is difference between Wrapped Bitcoin and Bitcoin? (Read 374 times)

This is a centralized token that is controlled by an official organization that complies with the law. Exchanges use tokenized assets for the convenience of their clients. There is no need to look for a conspiracy here. But a tokenized asset is more convenient in some cases, for example, in terms of the speed of transactions and the cost of commissions.

Since Wrapped Bitcoin is a token and cannot be compared to original Bitcoin and since there is an organization to control Wrapped Bitcoin it is not fully decentralized so it cannot be fully trusted like Bitcoin and it is wise not to store it. And I myself do bitcoin transactions through bitcoin addresses so I am not very familiar with Wrapped Bitcoin.  But when withdrawing Bitcoin I see Wrapped Bitcoin Withdrawal option in every exchange. Do you know why exchanges keep Wrapped Bitcoin as an option when withdrawing real Bitcoin? Where it is not a real bitcoin

Wrapped Bitcoin can be blocked because it is a token in popular ecosystems. Withdrawal fees from exchanges may be lower, but liquidity for large amounts is only available in the Ethereum ecosystem. I wouldn't store Wrapped Bitcoin in the Avalanche ecosystem for example.

Wrapped Bitcoin followed Bitcoin price it is true and it is also true that Wrapped Bitcoin Wrapped Bitcoin is considered by many to be the same as real Bitcoin. And many withdraw Wrapped Bitcoin when withdrawing from exchanges to save the withdrawal fees. That is why Wrapped Bitcoin is very popular.  And Wrapped Bitcoin works as an alternative to real Bitcoin

"Wrapped Bitcoin" is not used as true Bitcoin, it's just a token that follows the price of Bitcoin.

You can buy Bitcoin using any kind of payment, fiat, altcoins, etc. Wrapped Bitcoin simply is not Bitcoin. It's just another thing altogether.

Wrapped Bitcoin is not original Bitcoin which is develop my Satoshi nakamoto . It is controlled by an organization and its price is kept in line with the original Bitcoin . And it is also believed to be used as true Bitcoin.  And it allows everyone to transact Bitcoin through different chain like Ethereum, binance smart chain, Solana , polygon etc. This is basically how it works and we can use it constantly just like real Bitcoin. And every exchange and different organizations accept and give chance to exchange it as true Bitcoin.

First of all, a wrapped bitcoin won't get you pregnant, lol. But aside from the joke it is just a method to bring bitcoin into other chains, it is not really bitcoin, but how could you trade bitcoin itself on Bep20 for example, you can't and in order to do that, you have to trade wrapped bitcoin. That's really it, but if you are that much interested in bitcoin then go do it with the real one, or if you are really interested in bnb and its tokens then do that, do not bring that into each other if you ask me.

Never made that much sense, you can't even properly take it out that way neither which would cause a lot of trouble during the transaction period as well, not really too smart.

Why do I use WBTC? For decentralized trading.
https://bitcointalksearch.org/topic/cross-chain-bridge-aggregators-5389259
I think that WBTC is not a scam because they store real BTC, but there are risks of blocking.
For me, using centralized exchanges is considered a big risk, so I find it easier to use WBTC for trading. But I do not recommend storing these tokens for the long term.

As I know wrapped bitcoin is not in the bitcoin blockchain.

WBTC = Scam token

BTC = Real bitcoin runs on its native blockchain.

It doesn't matter how long you will be arguing about WBTC and the fact that WBTC was a scam token. The token gets its value from the trust of users. Once the funds that being used as reserved funds for WBTC would be stolen and then WBTC became garbage tokens. It's better to hold real bitcoin instead of using WBTC. Some people may not learn from what happened in the past when so many people were putting their money into the stable tokens and then it's gone like UST or anyother algorithmic token. Wrapped token has almost similar mechanism like stable token

In simple terms, a bitcoin is a valuable asset, and a wrapped bitcoin is just a wrapper residing in another blockchain. In essence, you have exchanged your real bitcoins for fake ones and now you have opportunities to, for example, stake bitcoin in some DeFi pool. The only thing is that the risks associated with this activity are much higher than the profit you can get from this staking.

When you exchange your bitcoins for wrapped bitcoins, you involve a third party in the process, and that's not safe. In general, bitcoin tokenization is unprofitable in the long run because bitcoins only get more expensive over time, but all sorts of pools and DeFi protocols often crash and get hacked.

WBTC is erc-20 a special token of ethereum.
there are 2 ways to get back to btc.
first is a CEX swap token:coin
which is a deposit - trade - withdrawal 3 step process

second requires converting it to a native ethereum and then using a CEX to then convert from ethereum to dollar or btc on a cex market
thus its a 5 step process
wbtc - erc20 - eth deposit- trade- btc withdrawal

yes wbtc team can decide not to allow conversions to native ethereum
yes ethereum team can change its code to lock up erc-20 as erc-20 and not convertible to native ethereum
yes CEX can delist ethereum, wbtc

There's no such decentralized in Ethereum network, it's centralized and Vitalik Butterin has full control over the network. If it's decentralized, we wouldn't see any news hacker can rob users money.

Wrapped Bitcoin doesn't have any value, they just following Bitcoin price.

It's true you can convert your WBTC to BTC, but it's depends on the WBTC's team if they want to convert it or not. Which mean if they turn to be scam, you don't have any way to convert it since they wouldn't want to convert your shitcoin (WBTC) to BTC.

To put it simply Bitcoin is real Bitcoin and wrapped Bitcoin is an IOU bitcoin.

Altcoins operate in their own network, completely separate from Bitcoin. They just create a new token/coin and say that they have Bitcoin reserves for it.

In reality it's just a fake Bitcoin. You don't really own Bitcoin when you buy a "wrapped" bitcoin, you're just buying a promise that someone will exchange that thing for Bitcoin in the future.

Simply put, it is for convenience's sake, to make certain transactions easy or possible. Since Bitcoin, and other coins for that matter that have their own native blockchains, can't be used on a different blockchain, innovators came up with wrapped versions. So these are basically tokens on different blockchains that mirror the price of Bitcoin. They can now be used on a network that otherwise cannot communicate with another network. These are not real Bitcoin, of course. The same goes with other wrapped coins.

wETH isn't pegged? Put of every coin i wouldn't imagine for them to not be able to have a token burn so you can get your eth back out (that feels lazy they haven't)...

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I couldn't confirm it anywhere but there was rumours wbtc would lose its peg (substantially) against btc because of the ftx insolvency and them being a main issuer of the coin.

The other problem with stablecoins and wrapped coins is that you can barely ever trade them 1:1, they're not quoted for market sells or buys in favour of the maker - so their price depends on how much you'll pay in fees too to do the trade and how liquid the wrapped token is - and so you'll probably never hold the true value of your coin if you "wrap" it until it gets unwrapped.

Well all the above said was right, there is no other than bitcoin, wrapped bitcoin is not a bitcoin they have different networks, while bitcoin was backed by blockchain while this wrapped bitcoin is under on ethereum network. It is only mirroring the value of bitcoin, which is only on the price but technically --it is not operated the same as bitcoin, there is no real meaning of decentralized except bitcoin backed by blockchain only. It sounds funny that this wrapped bitcoin claim itself that they have more features to use than bitcoin which it did not even do when it comes to protecting your privacy. The bitcoin protocol is unique to using smart contracts.

wrapped bitcoin is
btc->ethereum->erc-20->wbtc    3 peg distance from bitcoin

some sidechains coins subnetworks tokens and custodian balance are 1 peg steps from bitcoin
btc->liquid(lbtc)
btc->LN(msats)
btc->cex(btc balance)

though the 1 step pegs are still not 100% guaranteed convertible. its just less risk the less peg steps required
and all pegged coins/balanances are treated as IOU's until settled back to the bitcoin network as a confirmed bitcoin value

my personal risk awareness trust rating(my opinion based on flaws of each):
33%: btc->liquid(lbtc)
22%: btc->LN(msats)
11%: btc->cex(btc balance)
4%: btc->ethereum->erc-20->wbtc


the 1 step pegs are more trusted in a co-operative contract. but then there are many ways to not cooperate on the agreements of conversion and such you have to still be risk aware and take the risk dependant on how much value and convenience you want to risk in the side/subnetworks/custodian

i only rate sidechain coins as more trusted purely on things like them having some kind of multi-party federation peg thus less collusion by 1 attacher and having a blockchain of sorts to also mitigate certain attacks..
but i personally avoid any network thats not the bitcoin network

if i was to be want to invest in other currencies.. i too would take same principles of the main net vs their sidechains and subnets and be the same % for their risk vs mainnet holdings


usually best to keep hoard/main stash of coin in the mainnet of native true currency and only use daily spend amounts in the altnets

but again be risk aware, dont be duped into these altnets utopian promises of strength and security.

use them temporarily for a short time period.much the same as custodians.
dont treat these custodians/sidechains/subnetworks of 1 peg steps as solutions to bitcoin woes which should be deemed as bitcoin 2.0
think of them as service tokens for temporary service use

Wrapped bitcoin is not really a Bitcoin and it's just made up tokens on some centralized shitcoin blockchains that can be frozen at any time, or gone to zero because of some exploit.
Situation is similar with stablecoins and fista currencies like dollar, and we already saw many stablecoins stop existing and wild swings in their price.
I would stay away from using any fake bitcoin wrapped tokens, and only alternative is using Bitcoin second layers for this, so you will not depend on other coins.
 

An additional note: most of the hacks that occurred in recent years were due to bridges that are used to use Wbitcoins on other blockchains and many tokens have proven that they do not contain sufficient cover, meaning that you do not guarantee that your money will get the same value deposited.

So what you will get is low fees and ease of “de-centralized” transfer, but unfortunately WBTC are centralized and therefore it is better to use a centralized platform because it is faster and cheaper (since we are talking about close risk levels)