WBTC or also known as Zamotan Bitcoin, The ERC20 token that is supported in bitcoins has been enabled in the Main Network of Ethereus since January 29 for commercial exchange.
The information was spread in social networks by Staked, confirming not only the launch of a new token but the amount of assets released yesterday. Through WBTC, now Ethereum was represented by 65,421 BTCs, which can be used in intelligent decentralized exchange deals, forecasting markets and decentralized loans, among others.
Wasted Bitcoin (WBTC) is alive now!
Ethereum Block shows 65.4217 BTCs.
– Staked (@staked_us) January 29, 2019
If this number is true, Ethereum would have a greater share of bitcoins represented in its network than those currently in Bitcoin Chain, Liquid, According to current horse data, this network has a total of 53.32 BTCs present in its network, or approximately 12.10 BTC less than those represented in Ethereum through WBTC.
If https://t.co/xAbNgsjy2i is correct, this means that there are more BTCs on Ethereum than on many ballyhooed liquid side lines pic.twitter.com/u8yZ0N8o6Y
– Adam Tyree Finch (@atyreefinch) January 30, 2019
The WBTC token is an initiative led by BitGo for cryptoactive custodians, as well as decentralized Kyber Network and Republic Protocol exchange offices. The launch of this new token was announced in October 2018 through a press release explaining that the wrapped Bitcoin (WBTC) tag ERC20 was supported in bits in a representative ratio of 1: 1, The main goal of this initiative is to combine Bitcoin's liquidity and programming language Ethereum.
WBTC is a tokenized representation in Ethereum's preserved bits. Users wishing to purchase Bitcoin Wrapped go to the Kyber Network and Republic Protocol exchange offices that own and distribute this ERC20 token, exchanging their bitcoins for this token. In this way bitcoins delivered to the casas de cambo are delivered to BitGo for storage, a company that keeps them in a multi-note wallet and delivers WBTC in exchange.
All operations of this token will be registered in the Ethereum network. The management will be run by an autonomous and decentralized organization (DAO) comprised of representatives of MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, Prycto, Kyber Network, Republic Protocol and BitGo. They explain that in the future more participants will be able to join this DAO.
WBTC is a type of representative bridge between two networks. In this way, decentralized exchange houses that make life in Ethereum can benefit from the liquidity of Bitcoin, one of the currency with the largest number of transactions in the centralized exchange market worldwide – such as Binance, Coinbase and Bitfinex, embed it representatively with the awning chips.
"Today, most of the transactions take place with Battles in centralized exchange offices. WBTC changes that, bringing Bitcoin's liquidity to DEX (decentralized exchanges) and allowing Bitcoin to use tokent transactions, "the statement said.
Another feature offered by WBTC, according to its creators, is that this ERC20 token will enable Bitcoin users to use Ethereum smart deals, so that protocols for loans, bonds, token purchase, and forecast market can be canceled in a decentralized manner by Bitcoin.
WBTC makes a centralized alternative atomic exchange proposition developed by the cryptoelectric community since last year, enabling interaction between different blockchains through programmed and decentralized exchanges between the two networks. Centralized because the guardianship of the Battles that they support will be the responsibility of a central body.
Token "highly centralized"
One of the criticism most circulating around social networks about Bitcoin Wrapped is the fact that this service will be centralized, as confirmed by the initiative. "This sign is very centralized, as it is issued by the exchange offices, and the BTC keeps the entity," they explain in one of their publications.
In addition to the fact that the token will be issued and managed by the entity in a centralized manner, it is also important to consider that the revision of this tokens will be performed DAO whose representatives are members of companies and communities participating in the WBTC, It might be thought that this organization is not as decentralized and autonomous as would have been expected by a cryptovalutary community.
However, for greater autonomy of this service, DAO's authorities will be removed and added to the said organization through democratic votes among the members and will be able to maintain a greater balance of power among the issuing entities.
In line with the lack of decentralization, Sunny Aggarwal – researcher and development team of Tendermint – believes that guarding the beast is also a high risk service and that these types of chips, embedded in a preserved crypto currency, may be subject to the same regulatory rules as other stable banknotes, referring to an example of a Token Token Token (USDT) that has been reported by users for the censorship option of their issuers.
We recall that this wedge is extremely centralized and has a very high risk of detention. It is also in the same regulatory paradigm as things like the USDC. https://t.co/lirjrx5xb4
– Sunny Aggarwal (@ sunnya97) January 30, 2019
Clients who purchase WBTC also need to consider betting to change their bitcoins for representative bitcoins and to perform network operations that are not as secure as Bitcoin. Ethereum is a blockchain that has suffered several bifurcation and several bugs (bugs) since launching. In addition, it does not have the same CPU power as Bitcoin, which is exposed to possible attacks.
Among other criticisms and discussions after the launch of the WBTC, he points out tweet Erica Walla – engineer and director of Cinnobero – who ironically commented on the news: "Ethereum is the officially sideways Bitcoin chain", an estimation that generated conversations on Twitter and equally sarcastic responses from users who consider Bitcoin to become "Token" or "decentralized application" of Ethereum.
Great day in crypto. Ethereum is now officially Bitcoin's side chain. https://t.co/hIzi7SUniv
– Eric Wall (@ercwl) January 29, 2019
Other users answered that the term "side chain" can not be applied in the case of WBTC since Ethereum is not used as a network "confirming data from the second chain", as in the case of networks such as Liquid, BTCRelay and Lightning Network that check Bitcoin transactions .
By definition: "Sidechain is a blockchain that validates data from other block chains."
2-way-peg is an orthogonal concept.
– Alex Mizrahi (@killerstorm) January 29, 2019
Ethereum will also not help measuring Bitcoin, one of the main functions of side chains. However, WBTC makers want to use full tune properties of Ethereum to enable Bitcoin's "greater usability," since the programming language of this blockchain is limited. The same goal is being achieved by startups such as RSK, who have been working on integrating smart deals into the Bitcoin network through the side chain for several years.
Highlighted image of the author florin / stock.adobe.com