Wrapped Bitcoin

Wrapped Bitcoin is the process of locking your Bitcoin into a multi-sig account with a smart contract attached to it that issues a representative token known as wrapped Bitcoin.

What you’re doing is handing over your Bitcoin with finality to a 3rd party and getting a token that represents the amount of Bitcoin you pegged on to another chain. You can then use that wrapped Bitcoin or wBTC on this external chain to access services built on this chain.

The key motivation for using WBTC is its integration into the world of wallets, dapps, and smart contracts. 

WBTC was created to allow Bitcoin holders to participate in decentralised finance (“DeFi”) apps.

Wrapped BTC

If you prefer using Bitcoin as your store of value and do not want to trade into other tokens, but you’re keen on using dapps or exchanges on other chains, then wrapped Bitcoin can give you the option of exploring other blockchains.

Wrapped Bitcoin carries its own risk, as the smart contract you’re engaging with is a risk factor, the 3rd party you’re trusting to mint with is another risk and then finally, you are now trusting a far less secure chain when compared to that of the Bitcoin blockchain.

A large chunk of the DeFi ecosystem (and DApps) are based on smart contract networks rather than the Bitcoin blockchain. The wrapped Bitcoin allows users to bridge the gap and try these experimental platforms to earn an additional yield on their Bitcoin.

Wrapped Bitcoin is also an attractive option for those looking to purchase Bitcoin from exchanges that don’t require KYC, as you could trade with stable coins and secure wBTC. Then unwrap that wBTC and send it to a standard Bitcoin wallet.

If you prefer using Bitcoin as your store of value and do not want to trade into other tokens, but you’re keen on using dapps or exchanges on other chains, then wrapped Bitcoin can give you the option of exploring other blockchains.

Wrapped Bitcoin carries its own risk, as the smart contract you’re engaging with is a risk factor, the 3rd party you’re trusting to mint with is another risk and then finally, you are now trusting a far less secure chain when compared to that of the Bitcoin blockchain.

A large chunk of the DeFi ecosystem (and DApps) are based on smart contract networks rather than the Bitcoin blockchain. The wrapped Bitcoin allows users to bridge the gap and try these experimental platforms to earn an additional yield on their Bitcoin.

Wrapped Bitcoin is also an attractive option for those looking to purchase Bitcoin from exchanges that don’t require KYC, as you could trade with stable coins and secure wBTC. Then unwrap that wBTC and send it to a standard Bitcoin wallet.

Where can I find wrapped Bitcoin?

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