Difference between Bitcoin and Wrapped Bitcoin

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The most popular crypto in the world is still Bitcoin. It does not come with the same functionality as some other cryptos such as those tokens on the Ether blockchain. But just imagine if you could easily access Bitcoin on the Ether blockchain. This is the idea behind Wrapped Bitcoin, a Wrapped token based on Bitcoin yet used on the blockchain of Ether. If you are a beginner, engage in Bitcoin trading confidently with Bitcoin Revolution

What is Bitcoin?

It is the largest crypto worldwide as per market cap. It is native to the blockchain of Bitcoin. Since the time of its launch in 2009, the value of Bitcoin has been fluctuating. But consistently it has been the most popular crypto that found acceptance by prominent firms such as PayPal and Starbucks. But as the blockchain of Bitcoin lacks integration of smart contracts it can never be easily used in dApps.

What is Wrapped Bitcoin?

It is crypto designed for the blockchain of Ether from the ground up. It provides users with the opportunity of trading their Bitcoin for the Wrapped Bitcoin ERC-20 token standard. It tracks the price of Bitcoin. Yet gains the benefits of the blockchain of Ether. It will let holders of Bitcoin easily take benefit of the latest opportunities of DeFi. BitGo, Kyber, and Ren originally developed it. But now Wrapped Bitcoin DAO maintains Wrapped Bitcoin. It is one organization including more than 30 members. Yet it also means that it has centralized elements because an organization manages it.

How does a Wrapped Bitcoin work?

Any Bitcoin holder will be able to exchange Bitcoin for Wrapped Bitcoin at a ratio of 1:1 on a reliable crypto exchange. The mechanism of Wrapped Bitcoin holds the Bitcoin in exchange for the issued Wrapped Bitcoin. When any user wishes to swap their Wrapped Bitcoin back to Bitcoin, the Wrapped Bitcoin gets burned for maintaining correspondence among the two.

What can be done with a wrapped Bitcoin?

Bitcoin is known to be a cryptocurrency coin. Thus its uses are limited to storing the value as well as serving as an exchange medium. Wrapped Bitcoin will offer greater functionality. As one ERC-20 token, Wrapped Bitcoin includes a huge variety of use cases such as:

Offering liquidity to DEXs: With Wrapped Bitcoin, holders of Bitcoin have the chance of easily providing liquidity to DEXs and reap all rewards of doing it. Examples of famous decentralized exchanges directly accessible from the DeFi wallet are VVS and Uniswap.

Yielding farming: In the last few years, many DeFi lending platforms cropped up in the space of crypto. Wrapped Bitcoin lets holders invest in pools of liquidity and earn huge returns. A lending platform that is integrated natively with the Cronos ecosystem is Tectonic.  

Borrowing against Wrapped Bitcoin: If you wish to take a cryptocurrency loan, you can place Wrapped Bitcoin as collateral on any crypto exchanges offering lending in your jurisdiction.

How should you invest in Bitcoin and Wrapped Bitcoin?

Bitcoin and Wrapped Bitcoin both can be purchased on main centralized exchanges. For instance, one can buy Wrapped tokens on e-Toro making use of Coinbase Pro. Gemini will let one store Wrapped Bitcoin. Karen does not offer any purchase or storage. An individual will require a cryptocurrency wallet compatible with many tokens.

Also, it is possible to buy Wrapped Bitcoin on decentralized exchanges like Uniswap. But you generally must have one stash of ETH for directly purchasing Wrapped Bitcoin.

If anyone decides to have their own Wrapped Bitcoin minted, they will require to ensure that they have sufficient Bitcoin for completing the transaction. They need to go to Wrapped Bitcoin DAO for finding one merchant and submitting the request. There are many ways of wrapping Bitcoin such as making use of smart contracts tokenizing the Bitcoin you are having.

Yet Wrapped Bitcoin is the most famous version of a Wrapped Bitcoin token. So you are more likely to get liquidity when you stay focussed on Wrapped Bitcoin. If you are already aware of the ways of buying Bitcoin, you probably can get Wrapped Bitcoin too.

Conclusion

If you believe in Bitcoin yet wish to enjoy the full benefit of the latest DeFi and dApps opportunities then wrapped Bitcoin is a great idea. As the value of wrapped Bitcoin is linked to Bitcoin, you will be able to track the price of Bitcoin while enjoying the smart contract functionality of wrapped Bitcoin. Turn your Bitcoin into wrapped Bitcoin within a few minutes on a trustworthy exchange. 

Joel Picardo

Joel Picardo

Joel Picardo has been in the startup space for the last 5 years and has worked with startups in the cryptocurrency and digital marketing industry. He founded GeekyMint along with his co-founder SafdarAli with a mission to provide well-reseached articles in the cryptocurrency, finance, technology, blockchain, software, and startup sector

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