Introducing Wrapped Bitcoin, that aims to offer some crossover between the Bitcoin and Ethereum networks…
A new initiative to bring the Bitcoin and Ethereum networks together has been officially confirmed and announced – and it’s just months away.
Wrapped Bitcoin – WBTC – is set to launch in January of next year, and it’s a fully backed Bitcoin ERC20 token on Ethereum.
The project is the result of a partnership of companies, with BitGo, Kyber Network and Republic Protocol working together towards this for some time. Thanks to their efforts, WBTC will allow the use of the Ethereum network to develop new applications and such like for Bitcoin. Furthermore, the partnership has already attracted firms such as MakerDAO, Dharma, Airswap, Compound and Pycto, amongst the collection of launch members for the project.
In the words of Kyber Network’s co-founder and CEO Loi Luu, “this initiative will be bringing together the liquidity of Bitcoin and the extensive smart contract developer ecosystem of Ethereum”. He added that “applications on Ethereum such as decentralised exchanges and financial protocols will all be able to use Bitcoin seamlessly, creating Bitcoin trading pairs which have been impossible until now”.
And this is certainly breaking a degree of new ground, introducing a new degree of cross-compatibility to the two networks. It’s not the only project trying to do this, but might just become the highest profile, and potentially most effective.
To make it all work, users will need to deposit Bitcoins with BitGo in the first instance. Then, through use of a proof-of-reserve mechanism, WBTC is minted as an ERC20-backed token, working on a 1:1 ratio.
Transparency is a key selling point here, with the official announcement confirming that the WBTC dashboard will include proof-of-reserve, for extra piece of mind. Furthermore, the minting of WBTC will require permission in the first instance, and should a user want to covert their tokens back to Bitcoin, then the WBTC will be burned.
Full specifications are set to be released on GitHub/Gitter, ahead of the launch date in January.