Wrapped Bitcoin (WBTC) Is Now Live on Ethereum | Hacker News Reader

Wrapped Bitcoin (WBTC) Is Now Live on Ethereum

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31 pointstmlee15 comments

The article talks about Dapps and decentralized finance, but WBTC is centralized and managed by a custodians.

Sure you could use it in your smart contract, but it has the same kind of risks as using Tether. I think it can be dangerous to build layers of decentralized apps on top of something that's not.

(Or maybe I'm not understanding it correctly)

It's technically possible to implement this in a trustless decentralized way: https://en.bitcoin.it/wiki/Atomic_swap. I can't tell if this does it that way or in a centralized way though.

Atomic swaps don't make WBTC feasible in a trustless decentralized fashion. The swap itself is only a very small part of the problem. The article states they are using custodians to hold Bitcoins.

You can lock bitcoin up inside the BTC mainchain by using certain OP codes. This allows you to create a sidechain.

For example Liquid does this: https://blockstream.com/liquid/

Liquid holds btc using multisig not just OP codes.

This touches on an open question and design challenge in the crypto field:

- How to programmatically/formally measure/characterize decentralization ?

- How to show the decentralization level of a particular dApp function execution to the user ?

In that case, a contract could be totally decentralized but the monetary value part of WBTC is external and centralized. That could be potentially very confusing and unexpected for a user if the WBTC redeeming process ultimately fell through, and they may come to blame other unrelated parts of the process.

I would say that this is a good start. Another good asset backed token that is aiming towards decentralization would be MakerDAO and DAI

DAI is the USD stablecoin, overcollateralized by ETH and a variety of other ERC-20 tokens. And managed in a decentralized manner by MakerDAO token holders. A good experiment to watch imo

I don’t understand why anyone would use this instead of the real BTC or ETH.

At least there's an effort - it's slightly better that yet another fork looking to separate people from their hard earned BTC.

Still, 1/10, nothing to see, move along!

Because they can hold BTC for the purpose of using ethereum apps instead of selling BTC.

You don't actually hold BTC though, Bitgo does. It's more like a deposit certificate, if Bitgo were to lose the BTCs, all WBTCs would become worthless.

I much rather RSK's approach: bring easily programmable smart contracts to Bitcoin. Rather than bringing Bitcoin to smart contracts.

So that Ethereum contracts can interact with it.

In the context of Ethereum ecosystem, such as dapps or decentralized exchanges; this allows bitcoin to be treated like an ERC-20 token to interact with contracts

It’s difficult to keep up with this space...lots of innovation! But what’s the adoption rate of these new tools? Dozens of users a week? Hundreds? I would find it hard to believe thousands of people will use WBTC anytime soon.

See comment by @askmike, this is not innovation, this is bullshit. And maybe even deceptive because they took the name "WBTC" to mimic "WETH", however, the latter is truly decentralized and trustless, while the former is not.

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