Bitcoin on Ethereum Blockchain, fairy tale, or reality? An introduction of tBTC
The crypto world is a community that never sleeps, with different crypto and blockchain-based innovations springing up every moment. Have you ever imagined how possible it would be to use BTC on a blockchain that is Ethereum-based? Some years ago, this may have been an unthinkable impossibility, considering the controversy trailing both blockchains. However, with the increased interest in Ethereum-based innovations, there is an innovation that allows bitcoin users to use BTC within the Ethereum network.
Many Bitcoin users have been skeptical about jumping unto Ethereum-based DeFi projects, which is due to different reasons, including; perceived complexity, technicality, and security of the Ethereum blockchain, susceptibility to hacks and theft as a result of what happened with Mt. Gox back in 2014, etc. Interestingly, a lot has happened over the years, these innovative technologies are nothing like what they used to be some years ago, as there have been major improvements with the technologies, and these have taken the fairytale of BTC on Ethereum blockchain from fairytale to an actual system, with the introduction of tBTC.
What is tBTC?
tBTC is an innovation that lets Bitcoin users earn BTC on Ethereum-based decentralized finance (DeFi) systems without interference from 3rd parties or intermediaries. Remember there has been a problem of trust between Bitcoin and Ethereum users, coupled with past histories of irregularities, but with tBTC, they are presented with a level playing field. tBTC makes it easy for crypto users to redeem and deposit BTC without bothering about trust, security, and other perceived irregularities. The advent of an initiative like tBTC makes it very possible for Bitcoin users to benefit from the amazing features of DeFi. Here are some reasons why you should consider tBTC:
Simplicity
One amazing feature of tBTC is the simplicity that users will enjoy. Converting from BTC to tBTC is as simple as using just 3 steps.
BTC Backing
It may interest you to know that each of the tBTC is backed with BTC that is pegged at 1:1.
Improved Security
tBTC presents users with an open-source platform that gets audited regularly. Its functionality is dependent on the t-ECDSA algorithm
Decentralization
As a default function, the Ethereum blockchain which is the underlying tech to facilitate the operations of DApps and DeFi comes with a decentralization feature that knocks out any form of interference from intermediaries or 3rd parties.
Permissionless
The absence of a central authority or intermediary makes it easy and possible for users to make transactions anytime.
Improvement
No system that intends to thrive in a competitive market like the crypto space, does not do something to improve on its functionality. In order to make tBTC better, it implemented some changes including the expansion of its security protocol, as well as an adjustment to its audit framework, and a bug bounty that is fixed at 10x. The overall improvement of the tBTC platform is to present Bitcoin users with a seamless way to join the DeFi trend.
Randomness: Keep Network and tBTC
There are three projects involved in the functionality of tBTC; Keep, Cross-Chain Group, and Summa. These projects have their specific technical functions that make tBTC a safe platform for users to earn on the Ethereum-based platform with their Bitcoin. Keep’s part involves the provision of the random beacon that is saddled with the responsibility of selecting the signatories to tBTC deposits.
Keep brings different features to the system, and some of them include:
Privacy
As a way to improve the security of transactions, Keep provides an enhanced privacy framework for users by ensuring that important network components are kept as private as possible. Signing groups will not function except the signing takes place from a private key that is unknown to all, and this also affects the random beacon in the same way. Randomness is a core functionality of Keep, and there would have to be a collusion of the parties in order to ascertain what a user is up to; this collision is impossible because there is a randomness to the selection of signers, and that invariably promotes privacy of transactions.
Protection
It is important to note that tBTC is an on-chain framework; however, private information is stored by Keep with the aid of threshold ECDSA, and is kept off-chain. Keep communicates through the Ethereum chain but functions away from it, while the smart contract protocols of both the Keep network and tBTC interact with each other. This is a way to ensure that users’ privacy and earning remain protected.
Trustlessness
Trustlessness is assured with tBTC because the platform has a framework of “signers’ groups” that mitigates risks from counterparties. With the facilitation of the signers’ groups, transactions are performed without any form of interference from a middleman.
Primarily, Keep helps maintain the trustlessness needed to keep tBTC functioning effectively with the implementation of the random beacon.
Partnerships
It is difficult for any blockchain-based startup to succeed without some strategic partnerships, and that is why Keep has partnered with over 40 entities that include aggregators, stakers, auditors, decentralized applications and platforms, wallets, exchanges, providers of custody, and signers. Keep’s key investors include Draper Associates, Paradigm, Polychain Capital, Fenbushi Capital, and a16z. Keep and tBTC are in partnerships with notable companies, as a way to further increase tBTC’s reputation and reliance.
When a BTC user wants to use tBTC, they need to have their BTC converted into tBTC, which is an ERC-20 based token. Furthermore, they can do the same from tBTC to BTC, and all of the processes do not require any 3rd party signoff. This is a revolutionary innovation that will drive more bitcoin users into the DeFi market, and thus speed up the rate of mainstream adoption of such modes of crypto investments.
tBTC is a trusted, good, and secure way to use your BTC on an Ethereum blockchain that gives you access to different DeFi resources. It is quite easy for anyone to join tBTC as a signer, you can visit https://tbtc.network/ to get more information.
Published by Nikita#7876