Review on Wrapped Bitcoin by Murat Mircalı
Wrapped Bitcoin Review
WBTC is simply a method of representing Bitcoin with ERC-20 tokens, so that Bitcoin can be more easily managed in the Ethereum ecosystem. Each WBTC is 1: 1 supported with the same amount of Bitcoin. One of WBTC's main selling points is that it combines transactionable Bitcoin with Ethereum decentralized exchanges such as IDEX.
According to Cryptoglobe's report, the function of WBTC is practically less free than it seems. So WBTC does not offer a completely free function that users can use to wrap (pack) their Bitcoins; There is a complex supply chain set up to enable large crypto businesses to implement tokens, including KYC (Know Your Customer) and AML (Anti-Money Laundering) controls.
Users who want to wrap their bitcoins need to go to "vendors". In the Whitepaper, it is written that the vendor who controls KYC / AML "must protect the user's identity information safely". However, it is not the vendors that print the tokens. Only "guardians" can issue WBTC coins. Also only at the request of dedicated vendors - the only guardian at this stage is BitGo.
In the Whitepaper it is stated that "in a sense, the custodians are reliable within the system" because assets can be stolen and 1: 1 support cannot be paid for. Protectors also keep the private keys of the WBTCs they have printed and send Bitcoin to sellers only on request.
On the other hand, "third parties" do an inspection of all WBTCs every 3 months to make sure the custodians are storing equal amounts of BTC. All custodians and resellers also own multi-signature keys, they are needed in sidechains (side chain) to manage WBTC contracts.
You can buy WBTC Coin from Bitfinex platform, one of the oldest cryptocurrency exchanges in the world.
Pros
- With bitcoin their values are equal
- There are inspections every 3 months
- Valid on many exchanges
- It can be preferred for large investments
Cons
- None.
