The use of Bitcoin in other Blockchains through the «Wrapped Bitcoin» is not something new, this option has existed for some time in Ethereum and Tron. However, now the world’s leading exchange, Binance, has decided to create its own mechanism to use BTC on its Blockchain. Thanks to which, you can now use Bitcoin on the Binance Smart Chain with BTCB.
What is a Wrapped Bitcoin?
The Bitcoin Blockchain is one of the most important technological advances in human history. Not only because of the cryptocurrency it gave rise to, but also because of the blockchain revolution that it unleashed, with the decentralized creation of dozens of applications for the Blockchain.
However, not all of these functions are found in Bitcoin. In fact, most of the newer applications for Blockchain technology are located on alternative Blockchains to BTC. Which, like Ethereum, were specifically designed for the creation of this type of product.
This poses a problem for Bitcoin holders who want to be part of other sectors of the crypto world such as decentralized finance, located almost entirely on the Ethereum chain. Well, to be able to participate in these applications they would have to sell their BTC and acquire the cryptocurrency of the Blockchain in question. Something that not everyone wants to do.
That is why «Wrapped Bitcoin» was born, an initiative created in Ethereum and quickly replicated in Tron. Which allows Bitcoin users to “lock” their BTCs in a smart contract, for which they are provided as payment an amount of WBTC with which they can trade on the ETH chain. Being able to release your Bitcoins at any time by returning the WBTC used, thus gaining access to ETH applications, without losing control over your BTC at any time.
BTCB on the Binance Smart Chain
Thus, “Wrapped Bitcoin” have become one of the favorite products of crypto users. Which is why Binance, the Changpeng Zhao company that is currently working on the consolidation of its own Blockchain, would be announcing the launch of its version of Wrapped Bitcoin, the BTCB.
As with WBTC, in the case of Binance’s currency, users will be able to “lock in” their Bitcoins through a smart contract on the BTC Blockchain. In return, they will receive BTCB on the Binance Smart Chain in a 1: 1 ratio, with which they will be able to trade in the Binance chain ecosystem without having to sell their BTC.
Binance launches its own version of Wrapped Bitcoin on the Binance Smart Chain, BTCB. Source: Binance.
BTCB will operate through a centralized scheme controlled by Binance, unlike other fully decentralized Wrapped Bitcoin systems. Furthermore, BTCB can be stored in any wallet compatible with BEP2 / BEP 20 tokens, such as Binance Chain Wallet, Trust Wallet, BitKeep, SafePal, TokenPoket, and MathWallet.