On the Ethereum blockchain will be issued a token that is tied to the value of bitcoin. The project Wrapped Bitcoin (WBTC) is a collaborative effort Kyber Network, Protocol, and BitGo Republic. Startups: spoke about a new token in their blogs.
“Token will bring stability and value of bitcoin in the vast ecosystem of decentralized applications, Ethereum,” wrote startup BitGo.
It is expected that the issuance of such “licenzirovanie bitcoin” the blockchain virtual currency No. 2 may entail changes that could affect the cryptocurrency market as a whole.
First, it will allow to participate in the bitcoin smart contracts in the Ethereum blockchain. Despite the fact that many teams are experimenting with the creation of smart contracts in the private network bitcoins, including QTUM, running on a virtual machine Ethereum network, the leading cryptocurrency, and the Rootstock, mirroring the functions of Ethereum to the bitcoin, from the point of view of smart contracts Ethereum is a basic platform, while not having competitors. At the same time, we know that the prospects of decentralized applications on the Ethereum for some time now been challenged.
Secondly, the bitcoin price will directly affect the token on the Ethereum blockchain. The tokens will be provisioned BitGo and other participants in the project, and the developers worked out initiatives that will allow investors to have an accurate view of their savings. So, if you have 1 WBTC the user actually has the value of 1 BTC.
Kyber Network commented in his blog:
“First of all, Kyber will provide the initial liquidity for the tokens WBTC with the help of our reserve so that he could share in the same way as any other token ERC20, supported by our Protocol. Running on stage with Republic Protocol we will serve as the primary merchants, which provides a platform to users who have completed the KYC procedure (approx. “Know your customer”), for the atomic swaps between tokens BTC and WBTC”.
The essence of the project is likely to arrange the smooth connection between bitcoin and Ethereum. If the user is already the holder of bitcoins, he can easily go to the Ethereum network, using the option convert in the token WBTC, and then at any time to cash out, convert them back into bitcoin. Thus, if the user works with a decentralized Network Kyber or any of its partners, services centralized exchange is not required. Kyber assumes successful development of the project and the wide dissemination of the token.
Whether it is possible to arbitrage between BTC and WBTC, is unclear. Reportedly, several exchanges have already announced the desire to include the token in the listing.
“The concept of WBTC in its current form is only the first step on the way to the ideal decentralized solution, and for the community, it is important to unite efforts to create a more innovative and involving working ecosystems,” writes the team Kyber Network.