Wrapped Bitcoin (WBTC)

Wrapped Bitcoin: A Beginner's Guide

Wrapped Bitcoin (wBTC) is a type of cryptocurrency that has been converted for use on the Ethereum ecosystem. It was launched in January 2019 and is an Ethereum token that is backed one-to-one by bitcoin (BTC). This means that one wBTC is always equal to one bitcoin.

What is Wrapped Bitcoin (WBTC)?

Bitcoin is the most recognizable cryptocurrency in the world, but it doesn't natively support general smart contracts. This poses a challenge for using bitcoin in decentralized finance (DeFi) applications. Wrapped Bitcoin, also known as WBTC, is the solution to this problem. It allows bitcoin to be used on the Ethereum platform by creating an Ethereum token that represents bitcoin on a one-to-one basis.

Advantages of Wrapped Bitcoin

  • Interoperability: Wrapped Bitcoin enables bitcoin to be used on the Ethereum platform, opening up new possibilities for decentralized applications and smart contracts.
  • Liquidity: Wrapped Bitcoin increases the utility and liquidity of the Ethereum ecosystem by bringing in the value and market of bitcoin.
  • DeFi Integration: By wrapping bitcoin, users can access a wide range of decentralized finance applications and protocols on the Ethereum network, further expanding the use cases for bitcoin.

How Does Wrapped Bitcoin Work?

When users exchange BTC for wBTC, the original bitcoin is stored in a digital vault, and newly minted wBTC is released to the user. Wrapped Bitcoin is redeemable on a one-to-one basis with BTC, allowing users to wrap or unwrap their bitcoin whenever they choose. Exchanges may charge a small fee for wrapping or unwrapping transactions.

To make bitcoin compatible with the Ethereum network and its ERC-20 token standard, wBTC is created. This allows bitcoin to interact with other ERC-20 tokens on the Ethereum blockchain, expanding its potential use cases within the Ethereum ecosystem.

Overall, Wrapped Bitcoin bridges the gap between bitcoin and the Ethereum platform, enabling the benefits of both cryptocurrencies to be combined and leveraged within the expanding DeFi space.

... ...
... ...

Where to Buy Cryptocurrency Wrapped Bitcoin


Binance offers a centralized exchange where you can easily buy Wrapped Bitcoin, along with other cryptocurrencies. It provides a user-friendly interface, low fees, and high security. You can create a free account on the Binance website or app to get started.


Coinbase is another popular option for buying Wrapped Bitcoin. It is a centralized exchange that allows you to purchase various cryptocurrencies, including Wrapped Bitcoin. You can sign up for a Coinbase account, complete the verification process, and add a payment method to start buying Wrapped Bitcoin.

Bitcoin.com Wallet

The Bitcoin.com Wallet offers a secure and simple way to buy, sell, trade, and use Wrapped Bitcoin and other cryptocurrencies. It is a mobile and web-based wallet that allows you to effortlessly sync your assets across devices. You can connect to decentralized applications (DApps) and earn interest on your Wrapped Bitcoin.

Ledger Live App

The Ledger Live app provides a secure way to buy Wrapped Bitcoin by combining a hardware wallet with an app. You can purchase a Ledger hardware wallet and then use the app to buy Wrapped Bitcoin directly from their partner, Coinify. This ensures that your crypto assets remain safe and under your control.

Other Exchanges

There are various other cryptocurrency exchanges where you can buy, sell, and trade Wrapped Bitcoin. Some popular options include KuCoin, Huobi (HTX), OKX, and Coinbase Pro. It is essential to conduct your own research and choose a reputable exchange that meets your specific requirements.

Note: The availability of Wrapped Bitcoin and the supported payment methods may vary on each platform. Be sure to check the respective websites for the most up-to-date information.

Founders of Wrapped Bitcoin

The founders of Wrapped Bitcoin (WBTC) were BitGo Inc, Kyber Network, and Ren (formerly Republic Protocol).

About Wrapped Bitcoin

Wrapped Bitcoin (WBTC) is an Ethereum token that represents Bitcoin (BTC) on the Ethereum blockchain.

It was created to allow Bitcoin holders to participate in decentralized finance (DeFi) apps that are popular on Ethereum. 1 Bitcoin can be exchanged for 1 Wrapped Bitcoin, and vice-versa.

WBTC is maintained by a group called the WBTC DAO that consists of over 30 members.

The initial developers of the wrapped bitcoin protocol were BitGo Inc, Kyber Network, and Ren.

How Wrapped Bitcoin Works

When a user wants to wrap their Bitcoin, they send their Bitcoin to a custodian such as BitGo. Once the Bitcoin is received, the custodian mints an equivalent amount of WBTC and sends it to the user's Ethereum address.

The WBTC is an ERC-20 token that is backed 1:1 by Bitcoin.

Users can use WBTC on Ethereum-based platforms and services without having to sell their Bitcoin for ETH or ERC-20 tokens. They can also redeem their WBTC for Bitcoin by sending it back to the custodian.

WBTC is the most-used wrapper for Bitcoin, with over 270,000 Bitcoins currently held in custody and a total of over 335,000 Bitcoins (currently worth $13.6 billion) wrapped overall.


Roadmap and Future Plans of Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC) is an ERC-20 token that allows Bitcoin holders to participate in decentralized finance (DeFi) applications on the Ethereum blockchain.

It is a 1:1 representation of Bitcoin and is backed by BTC stored by custodians. The WBTC project is a collaboration between BitGo, Ren, and Kyber, and it aims to enable new use cases for Bitcoin on Ethereum.

Here is an overview of the roadmap and future plans for WBTC:


  • Listing on Binance
  • Listing on Bitget
  • Listing on BitMart
  • Listing on WhiteBIT
  • Listing on Coinsbit
  • Listing on XT
  • Listing on KuCoin
  • Listing on FatBTC
  • Listing on Hotbit
  • Listing on BKEX
  • Listing on OKEx
  • Listing on Huobi Global
  • Listing on Bitfinex
  • Listing on HitBTC

About WBTC

Wrapped Bitcoin is designed to bridge the gap between Bitcoin and Ethereum, allowing BTC holders to leverage DeFi applications and enjoy the benefits of the Ethereum ecosystem. It provides increased liquidity and trading volume for decentralized exchanges, overcoming the limitations of native ERC-20 tokens.

WBTC is verifiable through a "proof of reserve" system, ensuring a 1:1 backing of Bitcoin for every minted WBTC token. The WBTC DAO, consisting of more than 30 members, is responsible for maintaining and governing the project.

Roadmap Spotlight

One of the future research focuses for WBTC is the exploration of native Bitcoin as a "Bring Your Own Custodian" (BYOC) asset. This architecture would enable wrapped Bitcoin to be easily implemented and tied to a custody solution, further enhancing its functionality and adoption within the DeFi space.

Introduction to Wrapped Bitcoin

Wrapped Bitcoin, also known as WBTC, is a unique innovation in the world of cryptocurrencies. Now, you might be asking yourself, 'what on earth is Wrapped Bitcoin?' Well, in the simplest terms, it is Bitcoin but in a different format. Wrapped Bitcoin is essentially Bitcoin distilled into an ERC-20 token on the Ethereum blockchain.

But why would you want to wrap Bitcoin, you might wonder? The answer lies in the uniqueness and versatility of the Ethereum blockchain. While Bitcoin is undoubtedly the big daddy of cryptocurrencies, it has its own set of limitations when it comes to certain functionalities. In contrast, Ethereum's blockchain offers much broader applications and the integration with it is just more efficient.

What Is an ERC-20 Token?

An ERC-20 token is a standard used for creating and issuing smart contracts on the Ethereum blockchain. The term 'ERC-20' stands for 'Ethereum Request for Comment' and '20' is the number assigned to this specific proposal. It's essentially a set of rules that dictate how tokens can be transferred, how transactions are approved, how users can access data about a token, and the total supply of tokens.

How Does WBTC Work?

Now that you understand the basics, let’s dive into how WBTC actually works. For a Bitcoin to be wrapped, it has to be submitted to a specific set of merchants who will then carry out the transaction. These merchants essentially facilitate the 'wrapping' and 'unwrapping' process by exchanging the Bitcoin for the ERC-20 equivalent, which is the WBTC.

The wrapped version of Bitcoin holds the same value as the original Bitcoin, thus maintaining price parity. This is ensured by a process called 'over-collateralization', where the total value of WBTC in circulation is always fully backed and guaranteed by an equal amount (or more) of Bitcoin.

The Role of Smart Contracts

With WBTC, Bitcoin utilization in Ethereum's wide range of decentralized applications becomes a reality. This includes anything from loan protocols to prediction markets, to decentralized exchanges. As an ERC-20 token, WBTC can be integrated seamlessly into these apps using smart contracts. These are self-executing contracts where the terms of the agreement are directly written into lines of code. This allows for trustless, transparent, and automated transactions, thus expanding the overall utility of Bitcoin.

In conclusion, WBTC is an exciting development that bridges the gap between two significant cryptocurrencies - Bitcoin and Ethereum - and enables a new level of interoperability in the world of digital coins.

How Wrapped Bitcoin works

The concept of Wrapped Bitcoin (WBTC) revolves around a mechanism known as 'tokenizing', which involves representing an asset (in this case, Bitcoin) on another blockchain (in this case, Ethereum). The system works as follows:

  1. Depositing Bitcoin: A Bitcoin holder deposits their BTC into a specially designed smart contract on the Bitcoin network.
  2. Minting Wrapped Bitcoin: In return for the deposited Bitcoin, an equivalent amount of WBTC is minted on the Ethereum blockchain.

The Role of Custodians and Merchants

In the WBTC system, there are two key roles: custodians and merchants. Custodians are responsible for holding the actual Bitcoins in safekeeping, while merchants handle the distribution of the WBTC tokens. The process works this way:

  1. The role of the custodians: Custodians receive the Bitcoin deposited by users. Once they have verified the transaction, they communicate with a WBTC smart contract on the Ethereum network so that the corresponding amount of WBTC tokens can be minted.
  2. The role of the merchants: Merchants are the entities that users interact with. Users give Bitcoin to merchants, who then pass it to the custodians. Once the WBTC tokens have been minted, the merchants ensure that these tokens get to the users.

Transparency and Participatory Checks

One of the significant aspects of Wrapped Bitcoin is its focus on transparency and decentralized checks. Every WBTC token in existence is backed 1:1 by actual Bitcoin, held by the custodians. This ensures that the value of WBTC is essentially the same as BTC. Furthermore, this entire transaction process and the token's backing are recorded and easily verifiable on the blockchain, providing transparency and trust.

Regular audits are conducted on the system to ensure that for every WBTC token in existence, there's a corresponding Bitcoin held in custody. This works to forestall the potential for fraud and ensure that the system remains trustless - that is, not requiring users to trust in individuals or organizations, but instead trusting in the transparent, decentralized mechanism itself.

Redeeming WBTC for Bitcoin

Last but not least, it's also possible to convert WBTC back into BTC. This involves 'burning' WBTC tokens - that is, sending them to a specific Ethereum address where they are effectively removed from circulation. Once the tokens are confirmed as being burned, the corresponding Bitcoins are released from the custodians' control and returned to the user.

In summary, Wrapped Bitcoin provides a mechanism whereby Bitcoin can effectively interact with the Ethereum network, bringing the value and the vast community of Bitcoin holders into Ethereum's diverse ecosystem.

Uses of Wrapped Bitcoin

Wrapped Bitcoin, also known as WBTC, serves a significant role in the field of cryptocurrency. Its major purpose is to introduce liquidity into the Ethereum ecosystem. Essentially, WBTC exists to bridge the gap between Bitcoin and Ethereum, two distinct but highly influential cryptocurrencies.

Liquidity is paramount in the financial world and it refers to how quickly an asset can be converted into cash without affecting the market price. By 'wrapping' Bitcoin into Ethereum’s WBTC, liquidity within the Ethereum ecosystem is enhanced, allowing for smoother and more seamless transactions, hence diversifying the usability of Bitcoin in the expanding world of decentralized finance (DeFi).

As an ERC-20 token, WBTC can be utilized in various decentralized finance (DeFi) applications. One such application is lending. On certain platforms, you can lend your WBTC to earn interest, much like a traditional bank account but without the intermediary. For instance, if you own WBTC, you can loan it out to users who need assets for their operations, receiving a return on the WBTC lent out.

Staking is another DeFi application for WBTC. This method allows you to lock your tokens in a cryptocurrency wallet to support operations such as validating transactions in blockchain networks, and in return, you stand a chance to earn additional tokens. The staking model is relatively new and forms part of the shift to proof-of-stake (PoS) consensus mechanism rather than the traditional proof-of-work (PoW) model.

WBTC can also be used on decentralized exchanges (DEXs). These are essentially online marketplaces where you can exchange tokens directly with other users, without having a central authority overseeing these transactions, thus making these exchanges truly decentralized. These exchanges provide a platform for buying, selling, and trading cryptocurrencies. With WBTC, users have an additional, liquid asset available to them when making exchanges.

In summary, WBTC, with its primary function of enhancing Ethereum’s liquidity, further broadens the horizons of cryptocurrency use cases, particularly in the burgeoning space of DeFi. Its versatility in lending, staking, and decentralized exchanges marks the continuous evolution of the crypto space in creating more user-friendly and efficient financial solutions.

Benefits and Risks of Wrapped Bitcoin

Cryptocurrencies have revolutionized the financial world with their unique features and capabilities. Among the vast array of digital currencies available today, Wrapped Bitcoin (WBTC) has managed to court attention for its distinctive blend of features borrowed from Bitcoin and Ethereum.

WBTC combines the strengths of two renowned cryptocurrencies, which leads to several advantages. The first advantage lies in WBTC's relation to Bitcoin, one of the most widely adopted and recognized cryptocurrencies. WBTC allows you to transact using the value of Bitcoin, but within the Ethereum network. Therefore, the value of WBTC follows the value of Bitcoin, providing price stability.

The second advantage is that WBTC utilizes the flexibility of Ethereum’s blockchain. Ethereum's blockchain is not just a ledger for transactions, but also a platform for executing complex smart contracts - self-executing contracts that have the terms of the agreement directly written into code. This makes Ethereum's network far more versatile than many other blockchain systems, enabling you to do much more than just send and receive coins. By wrapping Bitcoin in an Ethereum-compatible format, WBTC brings Bitcoin's price stability to decentralized finance (DeFi) applications on Ethereum.

Potential Disadvantages and Risks Associated with WBTC

While Wrapped Bitcoin offers immense benefits, it is not without potential drawbacks. A key concern centers around the concept of trust. WBTC is not a Bitcoin but an Ethereum-based token that represents Bitcoin. Therefore, for every WBTC in circulation, an equivalent amount of Bitcoin is stored by a custodian. This leaves room for the centralization of control and requires users to trust the custodian to hold the right amount of Bitcoin.

Another risk stems from Ethereum's blockchain itself. Despite its flexibility and widespread use, Ethereum remains prone to network congestion, leading to delayed transactions and higher transaction fees. If the Ethereum network becomes significantly overloaded, it could make transactions involving WBTC slower and more expensive.

Lastly, WBTC, like all cryptocurrencies, is subject to regulatory risk. Government legislation pertaining to the use, trading, and exchange of cryptocurrencies varies widely and is subject to change. This regulatory uncertainty can lead to price volatility and influence the liquidity of WBTC.

In conclusion, WBTC integration into the world of cryptocurrencies has provided a platform that combines the benefits of both Bitcoin and Ethereum. While it boasts price stability and flexibility, potential users should also keep in mind the potential disadvantages and risks associated with its use.

How to acquire Wrapped Bitcoin

Wrapped Bitcoin, or WBTC, is a cryptocurrency that represents Bitcoin (BTC) on the Ethereum blockchain. This is achieved through a simple but clever system where each WBTC token is backed 1:1 by Bitcoin. This model allows the value of WBTC to remain precisely proportional to the value of Bitcoin while also bringing Bitcoin’s liquidity to Ethereum. Users can also participate in Ethereum's smart contracts while holding a token that has the value of Bitcoin.

What is Wrapped Bitcoin (WBTC)? How to get Wrapped Bitcoin:

Getting Wrapped Bitcoin involves some simple steps which vary depending on whether you choose a cryptocurrency exchange or a direct conversion service.

Through a Cryptocurrency Exchange:
  1. Set Up and Fund a Cryptocurrency Wallet: You'll need a digital wallet where you can store cryptocurrency. There are numerous wallet options available, some of the most famous being Coinbase, Binance, and Kraken.
  2. Buy Bitcoin: After setting up your wallet, you can now buy Bitcoin (BTC) using fiat currency.
  3. Exchange Bitcoin for Wrapped Bitcoin: Once you have Bitcoin, go to the exchange area on your chosen platform. You can then trade your Bitcoin for Wrapped Bitcoin at the going rate. Always be sure to double-check the conversion rate before you confirm the transaction.
Direct Conversion from Bitcoin:
  1. Choose a Bitcoin to Wrapped Bitcoin conversion service: There are certain services, such as CoinList and RenBridge, that allow direct conversion from Bitcoin to Wrapped Bitcoin.
  2. Send Bitcoin: Once you've chosen a service, follow their provided instructions to send Bitcoin to a designated address.
  3. Receive Wrapped Bitcoin: Once the transaction is verified, Wrapped Bitcoin will be deposited into your Ethereum wallet address. This allows you to use your WBTC within Ethereum’s ecosystem.

Please note that transaction times and fees will vary depending on the method you opt for and always remember to secure your cryptocurrency properly to prevent possible loss or theft.

As always, be mindful of the volatility of the cryptocurrency market when investing, and never invest more than you can afford to lose. Good luck with your WBTC journey!

Future of Wrapped Bitcoin

Wrapped Bitcoin (WBTC) is a token on the Ethereum blockchain that represents Bitcoin. One WBTC equals one Bitcoin. This has allowed the liquidity of Bitcoin to be utilised on Ethereum's more expansive and versatile platform, while retaining the same value as Bitcoin itself. It was designed to combine the value of Bitcoin with the flexibility of ERC20 tokens. So, what are ERC20 tokens? In simple terms, these are tokens designed and used solely on the Ethereum platform. They follow a list of standards so that they can be shared, exchanged for other tokens, or transferred to a crypto-wallet.

Here's the practical side of it: Bitcoin is the biggest and most recognized cryptocurrency, the one with the most liquidity. Ethereum, on the other hand, is the leading platform for creating decentralised applications, using what are commonly referred to as 'smart contracts'. Smart contracts are simply self-executing contracts with the agreement between buyer and seller being directly written into lines of code. Bringing Bitcoin into Ethereum’s orbit allows more people to use these smart contracts, growing the decentralized finance (DeFi) ecosystem.

The future trajectory of WBTC seems to be one of continued relevance and growth within the cryptocurrency sector. Even though the rapid ascent of Ethereum's native cryptocurrency, Ether, has garnered significant attention lately, Bitcoin still holds its crown as the leading cryptocurrency. Hence, the demand for WBTC should sustain as long as Bitcoin and Ethereum maintain their standing in the cryptocurrency hierarchy.

As for the impact on DeFi, it's important to understand that decentralized finance is all about eliminating intermediaries like banks and brokers. Instead, transactions are made directly between parties. WBTC permits Bitcoin, being held in reserves within a network of institutions known as 'merchants', to be utilized as collateral for financial services in a number of DeFi apps. As such, it's feasible that WBTC will play a significant role in shaping the DeFi landscape by unlocking Bitcoin's value for this particular sector.

However, challenges do exist. The primary one stems from the element of centralization within the WBTC framework: 'merchants' must be trusted to custody the Bitcoin collateral effectively, a principle which somewhat opposes the notion of decentralization itself. If this issue can be addressed to an extent that fulfills the decentralization ideal held by many within the cryptocurrency community, WBTC's growth may not just sustain, but accelerate.

On balance, the outlook for WBTC appears positive. Its relevance as a bridge between Bitcoin and Ethereum’s universe, its potential for unlocking Bitcoin's liquidity within decentralized finance, and its recent growth signals a promising trajectory. However, the true scale of this trajectory will depend on how effectively its inherent challenges are navigated.