The top headline on the WBTC homepage is ‘Do More with Your Bitcoin’, and that’s exactly what WBTC is all about. WBTC is short for ‘Wrapped Bitcoin’ which is to be the first ERC20 token on the Ethereum blockchain with its value tied directly to the value of Bitcoin. WBTC is the creation of combined efforts including the Kyber Network, BitGo, AirSwap and others.
The reason behind their efforts?
To create a token with the value of Bitcoin that can be easily traded on decentralized networks increasing the liquidity of the market.
WBTC is now going to allow Bitcoin to utilize smart contracts on the Ethereum blockchain. Bitcoin has attempted to create its own smart contract system in the past, but each attempt was met with failure of unpopularity; Ethereum remains the favorite for smart contract transactions. Now, Bitcoin users will have the flexibility to use Ethereum’s decentralized smart contract technology without waiting for Bitcoin’s slow exchange times.
Not only is WBTC increasing flexibility and utility, it is also now going to allow for tokens on the Ethereum blockchain to be directly impacted by Bitcoin prices. The tokens are to be backed by the reserves of the participants in the project including BitGo. If you hold one WBTC, you hold one BTC’s value.
WBTC will theoretically allow seamless transactions for traders between Bitcoin and Ethereum. Users will be able to trade between the two tokens without the use of a centralized exchange if they are equipped with the Kyber Network or any of its applications.
The major concern that is already surrounding the announcement of WBTC is if the value of WBTC will stay directly tied to that of Bitcoin. Recently we’ve seen the “stable coin” Tether, be unstable. Who’s to say the same wont happen to WBTC?
Either way, many exchanges have already agreed to list the token.
For more information regarding the launch of WBTC network, visit their website.