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Wrapping Cryptocurrencies for interoperability sake


Understanding TokenCreator/OwnedToken example from Solidity documentationCategorising tokens: is there pros and cons of ERC20 described anywhere & comparison with other subcurrency impl?How excatly Bancor works (for non-economists)how does a lightweight node interact with smart contracts?are the ERC721 smart contracts compatible with Zk-SNARKs?fallback function is accepting more than 2300 gasHow can the cost of changing 2 state variables and emitting 1 event reach 50K gas units?What is a common pattern to work with a large number of complex Things: make a Thing a contract, or a struct in a mapping?Smart contract - require token balance in constructorSolidity 0.5.x - make address array payable













1















How is it possible to standardize bitcoin and wrap it to the ERC20 format, creating smart contracts for Bitcoin. This should make it easier to write smart contracts that integrate bitcoin transfers apparently, but for my understanding this makes no sense since the code bases are alien to each other. Can someone elaborate? this seems rather complex?










share|improve this question


























    1















    How is it possible to standardize bitcoin and wrap it to the ERC20 format, creating smart contracts for Bitcoin. This should make it easier to write smart contracts that integrate bitcoin transfers apparently, but for my understanding this makes no sense since the code bases are alien to each other. Can someone elaborate? this seems rather complex?










    share|improve this question
























      1












      1








      1


      1






      How is it possible to standardize bitcoin and wrap it to the ERC20 format, creating smart contracts for Bitcoin. This should make it easier to write smart contracts that integrate bitcoin transfers apparently, but for my understanding this makes no sense since the code bases are alien to each other. Can someone elaborate? this seems rather complex?










      share|improve this question














      How is it possible to standardize bitcoin and wrap it to the ERC20 format, creating smart contracts for Bitcoin. This should make it easier to write smart contracts that integrate bitcoin transfers apparently, but for my understanding this makes no sense since the code bases are alien to each other. Can someone elaborate? this seems rather complex?







      solidity go-ethereum contract-development contract-design tokens






      share|improve this question













      share|improve this question











      share|improve this question




      share|improve this question










      asked 4 hours ago









      NowsyMeNowsyMe

      331418




      331418




















          1 Answer
          1






          active

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          2














          If you're referring to Wrapped BTC (WBTC), it has nothing to do with the Bitcoin Network. 1 WBTC is equal to 1 BTC purely through a custodial pegging system. To mint a WBTC ERC-20 token, you must lock-up a BTC.



          This lets BTC be 'represented' on the Ethereum blockchain and can be used in different dApps, commonly financial ones.



          If you're familiar with Wrapped ETH (WETH) it is the exact same concept except the process to wrap ETH is trust-less and done on the Ethereum blockchain (b/c ETH is native to the blockchain). The process to wrap BTC is not currently trust-less, you need to send your BTC to BitGo, a Bitcoin custodial exchange.



          Then with the ERC-20 version of BTC, you can do with it whatever you can do with any ERC-20 in smart contracts.




          This should make it easier to write smart contracts that integrate bitcoin transfers apparently,




          With the ERC-20 version of BTC, you can call safeTransferFrom() like with any ERC-20 token. This'll transfer the WBTC to whichever Ethereum address chosen. Now this Ethereum address has 1 WBTC (in this example) but the Bitcoin Network doesn't somehow credit this Ethereum address with 1 BTC. As far as the Bitcoin Network knows, the BTC is still held by BitGo (the BTC exchange you lock-up BTC for WBTC).



          How does this person who just received 1 WBTC get credit with 1 true BTC, and have their ownership of the BTC registered with the Bitcoin Network? They go to BitGo and 'cash-in' their WBTC. The rate will always be 1 WBTC:1 BTC, so BitGo will send their Bitcoin address of choice the 1 BTC.



          Standardizing and wrapping any non-native coin as an ERC-20 on Ethereum doesn't have 'real' interoperability with the other blockchain. As you stated, this would be way more complex than the process I described above, and the process used currently (pegging).



          For true interoperability, as you may be envisioning, check out Cosmos Network. They are trying to build an 'internet of blockchains' and just launched main-net. They standardize blockchains, not tokens/coins, to allow true interoperability (basically so the code bases are the same). I think you'd find the project interesting!



          I hope this answered your question. Here is WBTC's official site where you can read more about the process they use: https://www.wbtc.network/






          share|improve this answer

























          • great answer thanks! spot on

            – NowsyMe
            2 hours ago











          • Awesome, glad to help!

            – savard
            2 hours ago










          Your Answer








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          1 Answer
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          active

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          active

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          active

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          2














          If you're referring to Wrapped BTC (WBTC), it has nothing to do with the Bitcoin Network. 1 WBTC is equal to 1 BTC purely through a custodial pegging system. To mint a WBTC ERC-20 token, you must lock-up a BTC.



          This lets BTC be 'represented' on the Ethereum blockchain and can be used in different dApps, commonly financial ones.



          If you're familiar with Wrapped ETH (WETH) it is the exact same concept except the process to wrap ETH is trust-less and done on the Ethereum blockchain (b/c ETH is native to the blockchain). The process to wrap BTC is not currently trust-less, you need to send your BTC to BitGo, a Bitcoin custodial exchange.



          Then with the ERC-20 version of BTC, you can do with it whatever you can do with any ERC-20 in smart contracts.




          This should make it easier to write smart contracts that integrate bitcoin transfers apparently,




          With the ERC-20 version of BTC, you can call safeTransferFrom() like with any ERC-20 token. This'll transfer the WBTC to whichever Ethereum address chosen. Now this Ethereum address has 1 WBTC (in this example) but the Bitcoin Network doesn't somehow credit this Ethereum address with 1 BTC. As far as the Bitcoin Network knows, the BTC is still held by BitGo (the BTC exchange you lock-up BTC for WBTC).



          How does this person who just received 1 WBTC get credit with 1 true BTC, and have their ownership of the BTC registered with the Bitcoin Network? They go to BitGo and 'cash-in' their WBTC. The rate will always be 1 WBTC:1 BTC, so BitGo will send their Bitcoin address of choice the 1 BTC.



          Standardizing and wrapping any non-native coin as an ERC-20 on Ethereum doesn't have 'real' interoperability with the other blockchain. As you stated, this would be way more complex than the process I described above, and the process used currently (pegging).



          For true interoperability, as you may be envisioning, check out Cosmos Network. They are trying to build an 'internet of blockchains' and just launched main-net. They standardize blockchains, not tokens/coins, to allow true interoperability (basically so the code bases are the same). I think you'd find the project interesting!



          I hope this answered your question. Here is WBTC's official site where you can read more about the process they use: https://www.wbtc.network/






          share|improve this answer

























          • great answer thanks! spot on

            – NowsyMe
            2 hours ago











          • Awesome, glad to help!

            – savard
            2 hours ago















          2














          If you're referring to Wrapped BTC (WBTC), it has nothing to do with the Bitcoin Network. 1 WBTC is equal to 1 BTC purely through a custodial pegging system. To mint a WBTC ERC-20 token, you must lock-up a BTC.



          This lets BTC be 'represented' on the Ethereum blockchain and can be used in different dApps, commonly financial ones.



          If you're familiar with Wrapped ETH (WETH) it is the exact same concept except the process to wrap ETH is trust-less and done on the Ethereum blockchain (b/c ETH is native to the blockchain). The process to wrap BTC is not currently trust-less, you need to send your BTC to BitGo, a Bitcoin custodial exchange.



          Then with the ERC-20 version of BTC, you can do with it whatever you can do with any ERC-20 in smart contracts.




          This should make it easier to write smart contracts that integrate bitcoin transfers apparently,




          With the ERC-20 version of BTC, you can call safeTransferFrom() like with any ERC-20 token. This'll transfer the WBTC to whichever Ethereum address chosen. Now this Ethereum address has 1 WBTC (in this example) but the Bitcoin Network doesn't somehow credit this Ethereum address with 1 BTC. As far as the Bitcoin Network knows, the BTC is still held by BitGo (the BTC exchange you lock-up BTC for WBTC).



          How does this person who just received 1 WBTC get credit with 1 true BTC, and have their ownership of the BTC registered with the Bitcoin Network? They go to BitGo and 'cash-in' their WBTC. The rate will always be 1 WBTC:1 BTC, so BitGo will send their Bitcoin address of choice the 1 BTC.



          Standardizing and wrapping any non-native coin as an ERC-20 on Ethereum doesn't have 'real' interoperability with the other blockchain. As you stated, this would be way more complex than the process I described above, and the process used currently (pegging).



          For true interoperability, as you may be envisioning, check out Cosmos Network. They are trying to build an 'internet of blockchains' and just launched main-net. They standardize blockchains, not tokens/coins, to allow true interoperability (basically so the code bases are the same). I think you'd find the project interesting!



          I hope this answered your question. Here is WBTC's official site where you can read more about the process they use: https://www.wbtc.network/






          share|improve this answer

























          • great answer thanks! spot on

            – NowsyMe
            2 hours ago











          • Awesome, glad to help!

            – savard
            2 hours ago













          2












          2








          2







          If you're referring to Wrapped BTC (WBTC), it has nothing to do with the Bitcoin Network. 1 WBTC is equal to 1 BTC purely through a custodial pegging system. To mint a WBTC ERC-20 token, you must lock-up a BTC.



          This lets BTC be 'represented' on the Ethereum blockchain and can be used in different dApps, commonly financial ones.



          If you're familiar with Wrapped ETH (WETH) it is the exact same concept except the process to wrap ETH is trust-less and done on the Ethereum blockchain (b/c ETH is native to the blockchain). The process to wrap BTC is not currently trust-less, you need to send your BTC to BitGo, a Bitcoin custodial exchange.



          Then with the ERC-20 version of BTC, you can do with it whatever you can do with any ERC-20 in smart contracts.




          This should make it easier to write smart contracts that integrate bitcoin transfers apparently,




          With the ERC-20 version of BTC, you can call safeTransferFrom() like with any ERC-20 token. This'll transfer the WBTC to whichever Ethereum address chosen. Now this Ethereum address has 1 WBTC (in this example) but the Bitcoin Network doesn't somehow credit this Ethereum address with 1 BTC. As far as the Bitcoin Network knows, the BTC is still held by BitGo (the BTC exchange you lock-up BTC for WBTC).



          How does this person who just received 1 WBTC get credit with 1 true BTC, and have their ownership of the BTC registered with the Bitcoin Network? They go to BitGo and 'cash-in' their WBTC. The rate will always be 1 WBTC:1 BTC, so BitGo will send their Bitcoin address of choice the 1 BTC.



          Standardizing and wrapping any non-native coin as an ERC-20 on Ethereum doesn't have 'real' interoperability with the other blockchain. As you stated, this would be way more complex than the process I described above, and the process used currently (pegging).



          For true interoperability, as you may be envisioning, check out Cosmos Network. They are trying to build an 'internet of blockchains' and just launched main-net. They standardize blockchains, not tokens/coins, to allow true interoperability (basically so the code bases are the same). I think you'd find the project interesting!



          I hope this answered your question. Here is WBTC's official site where you can read more about the process they use: https://www.wbtc.network/






          share|improve this answer















          If you're referring to Wrapped BTC (WBTC), it has nothing to do with the Bitcoin Network. 1 WBTC is equal to 1 BTC purely through a custodial pegging system. To mint a WBTC ERC-20 token, you must lock-up a BTC.



          This lets BTC be 'represented' on the Ethereum blockchain and can be used in different dApps, commonly financial ones.



          If you're familiar with Wrapped ETH (WETH) it is the exact same concept except the process to wrap ETH is trust-less and done on the Ethereum blockchain (b/c ETH is native to the blockchain). The process to wrap BTC is not currently trust-less, you need to send your BTC to BitGo, a Bitcoin custodial exchange.



          Then with the ERC-20 version of BTC, you can do with it whatever you can do with any ERC-20 in smart contracts.




          This should make it easier to write smart contracts that integrate bitcoin transfers apparently,




          With the ERC-20 version of BTC, you can call safeTransferFrom() like with any ERC-20 token. This'll transfer the WBTC to whichever Ethereum address chosen. Now this Ethereum address has 1 WBTC (in this example) but the Bitcoin Network doesn't somehow credit this Ethereum address with 1 BTC. As far as the Bitcoin Network knows, the BTC is still held by BitGo (the BTC exchange you lock-up BTC for WBTC).



          How does this person who just received 1 WBTC get credit with 1 true BTC, and have their ownership of the BTC registered with the Bitcoin Network? They go to BitGo and 'cash-in' their WBTC. The rate will always be 1 WBTC:1 BTC, so BitGo will send their Bitcoin address of choice the 1 BTC.



          Standardizing and wrapping any non-native coin as an ERC-20 on Ethereum doesn't have 'real' interoperability with the other blockchain. As you stated, this would be way more complex than the process I described above, and the process used currently (pegging).



          For true interoperability, as you may be envisioning, check out Cosmos Network. They are trying to build an 'internet of blockchains' and just launched main-net. They standardize blockchains, not tokens/coins, to allow true interoperability (basically so the code bases are the same). I think you'd find the project interesting!



          I hope this answered your question. Here is WBTC's official site where you can read more about the process they use: https://www.wbtc.network/







          share|improve this answer














          share|improve this answer



          share|improve this answer








          edited 2 hours ago

























          answered 3 hours ago









          savardsavard

          829




          829












          • great answer thanks! spot on

            – NowsyMe
            2 hours ago











          • Awesome, glad to help!

            – savard
            2 hours ago

















          • great answer thanks! spot on

            – NowsyMe
            2 hours ago











          • Awesome, glad to help!

            – savard
            2 hours ago
















          great answer thanks! spot on

          – NowsyMe
          2 hours ago





          great answer thanks! spot on

          – NowsyMe
          2 hours ago













          Awesome, glad to help!

          – savard
          2 hours ago





          Awesome, glad to help!

          – savard
          2 hours ago

















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