Note: This post contains affiliate links. I will be earning certain bonuses if you click through the links, and I aim to be very transparent by letting you know what I stand to gain.
When it comes to cryptocurrencies, Bitcoin has long been the gold standard. Many people buy Bitcoin with the hope that it will rise in value over time.
However, there are several other cryptocurrencies or “altcoins” out there that have the potential to gain rapidly in value as well.
Ethereum is one such example. Exploding more than 500% from 2020 to 2021, it reached an all-time high of $4,165 just over 2 months ago.
With its native network consisting of different protocols like ERC-20, developers have delved into DeFi Protocols to gain more yield on their Ether.
How can you then, as a retail investor make use of this opportunity to gain more on your Bitcoin and Ether since they run on different networks?
Introducing Wrapped Bitcoin (WBTC)!
What is Wrapped Bitcoin (WBTC)?
The concept behind Wrapped Bitcoin (WBTC) is simple: a token that is Bitcoin where you still maintain ownership, but using it on a different Blockchain.
Think of Blockchains like different card providers. Visa, Master, Amex and Discover are some examples. Currencies USD, SGD, MYR and JPY serve as BTC and ETH parallels.
The latter serves the same function of providing people like you and me the opportunity to pay merchants of the respective countries for products & services utilized, but you can't expect to eat in a restaurant in Japan and pay with SGD right? However, by paying with your Visa or Master card, you are essentially forming 'a bridge' between currencies so that the merchant can receive JPY, but you pay in SGD.
Bitcoin (in this case, it is SGD), can run on the Ethereum Network (JPY) through 'wrapping' it with consensuses from Ethereum (Visa).
WBTC still possess the main features of Bitcoin, such as being the token with the largest volume in the cryptocurrency market. However, it will also have additional features, such as the ability to participate in DeFi Protocols that run on smart contracts, potentially gaining the retail investor more gains on their investments.
How to buy Wrapped Bitcoin (WBTC), or wrap Bitcoin?
There are 2 ways that you can go about owning the asset:
Buying it on Exchanges like Binance and Coinbase.
'Manually' wrapping it yourself
The first method is recommended for people who do not want to jump through technical hoops to own WBTC. Exchanges like Coinbase and Binance would do the trick!
The second method would be quite intimidating for someone new to crypto, so I wouldn't recommend it if I were you. They work somehow like DeFi Protocols, but they are technically not.
But if you are interested, you can check out https://wbtc.cafe/.
In conclusion, wrapping a cryptocurrency is a way of 'bridging' a crypto and allowing it to function on a different blockchain. This allows you to retain ownership while enjoying the advantages that a different blockchain might offer.
Join My Telegram Channel Here For Blog Updates And More!
Referral Links (Click and Sign Up)
You earn: Earn US$20 in-kind when you deposit USD$1000 or more.
I earn: 10% commission of your interest earned weekly
You earn: Buy US$100 or more crypto on Gemini and you will earn US$10 in BTC.
I earn: US$10 in BTC
You earn: No bonuses at the moment.
I earn:20% commission on your transaction fees
You earn: 20% discount on your trading fees.
I earn: 20% commission on your transaction fees
You earn: US$40 in BTC for free with your first transfer of US$400 or more in any crypto asset and wait for 1 month!
I earn: US$40 in BTC
You earn: No bonuses at the moment, but they offer very lucrative interest rates at up to 12.7% APY.
I earn: US$30
You and I earn USD$25 in CRO for a minimum 5000 CRO stake for 180 days.