Cryptocurrency custodian & largest Bitcoin processing company, Bitgo, in conjunction with Republic Protocol & Kyber Network two decentralised exchanges in a joint effort conceived and created an innovative new token allowing Bitcoin to trade directly on the Ethereum Blockchain. The joint group set to release the newly developed WBTC or “wrapped Bitcoin” in January 2019 with ethereum-based projects Dharma, Gnosis, Compound, MakerDAO, Airswap, Hydro Protocol, DDEX, IDEX, Prycto, Radar Delay, and Set Protocol supporting token adoption at the time.
WBTC value will tie directly to that of Bitcoin and according to projections impact cryptocurrency in two notable areas. In the first, Bitcoin will participate directly on Ethereum blockchain via Ethereum smart contracts, where to date numerous previous endeavours failed to yield positive results dictating Ethereum remained as primary smart contracts method.
According to Benedict Chan, Bitgo CTO, this development leaves the WBTC token as a “the best of both worlds” solution, retaining the flexibility of Ethereum while incorporating the stability of Bitcoin. Resultantly, Bitcoin value via the WBTC will directly impact a token on Ethereum’s blockchain, with tokens backed by reserves from all protect participants such as Bitgo.
This ensures investors understand what they hold in place, 1 WBTC retains a value equivalent to 1 BTC.
The primary goal of the project is to provide an uncomplicated, convenient method of facilitating transition between Bitcoin and Ethereum. Individuals holding Bitcoin can insert their currency onto the Ethereum network via a WBTC token and simultaneously retain the capacity to, at an un-predetermined future time, cash out again in Bitcoin.
A Kyber network blog stated the company would provide initial liquidity for required WBTC tokens through their reserve, in order to facilitate an exchange similar to all other ERC20 tokens on their protocol. At the launch, Kyber in conjunction with Republic Protocol undertake to serve as initial traders creating a merchant platform where KYC enabled users automatically swap between BTC & WBTC tokens.
Project participants and Kyber Network equipped entities will not require any form of centralised exchange. Subsequently, Kyber expects to see a broad-spectrum project expansion in the near future, whereupon the blog further writes that WBTC’s current iteration comes just as the first step in the journey to create an ideal decentralised solution. Going on to further state, it remains important for their community to continue working together towards finding a more innovating, interoperable ecosystem. Several crypto exchanges already stated their intent to list the innovative new token solution.
In many ways, the new solution shares similarities with the manner in which financial institutions created bank notes to represent an equal value in gold. With the well-received bank guaranteed paper notes effectively replacing common everyday trading in gold to instead trade in a more accurately valued and convenient to carry currency.
Practical Trading Benefits
The new technologies would similarly bring about numerous spin-off benefits to industries such as the online gambling environment, allowing players greater payment flexibility amongst casinos trading in cryptocurrencies. Interested parties can read more on this at premier online news sites such as Betenemy, known for its standard of advice and quality reporting on finding one of the best bonuses, trustworthy independent bookmaker & casino reviews, and interesting, useful tips on how to find the best entertainment venues in the online gambling industry.