Ethereum is the best platform for Bitcoin

Through the years they have developed a variety of supplementary protocols to Bitcoin, such as Lightning Network for payment or Liquid Network for the trade. But to date, the platform outside of the Blockchain (off-chain) more popular than using Bitcoin, ironically, comes from the hand of his main rival: Ethereum.

“The Bitcoins tokenizados” allow users to perform transactions in Bitcoin in the ecosystem of finance decentralised (DeFi) of Ethereum. Instead of using Ether (ETH), the native currency of Ethereum, will employ these values.

Camila Russo, freelance writer and author of the book “The Infinite Machine” about Ethereum and their progress, delves deeper into the issue. Mentioned that projects in Ethereum, including Wrapped Bitcoin (wBTC) and The Tokenized Bitcoin (imBTC) keep 70% more Bitcoin than Lightning or Liquid.

“Ethereum was designed to be “more flexible”, this allows the protocols tokenizados to prosper.”

Camila Russo

Though the supply of Bitcoin tokenizados grew by 330% so far this year, it should be noted that the total amount of BTC your content outside of your Blockchain is natively small. Only kept 8.285 BTC, which is equivalent to a value of US$ 79 million, compared with 18.4 million issued since 2009.

Some projects based on the platform of Ethereum are complementary

Kiarash Mosayeri, a product manager in the wallet BitGo, is a true believer that some Bitcoins tokenizados are complementary to other protocols:

“wBTC represents a digital asset (Bitcoin) in the chain of Ethereum, and is truly complementary to Lightning”.

Kiarash Mosayeri

Graphical comparison of the supply of BTC off chain-in protocols based on Bitcoin and Ethereum. Source: CoinDesk

In January 2019, Mosayeri helped propel wBTC in its launch. He implies that “the growth in protocols out-of-Blockchain-based Ethereum will lead the adoption and increase the network effect for Bitcoin, attracting more developers to the platform.”

In addition, Matt Luongo, CEO of Thesis, who launched the token tBTC, declared their position in regard to the protocols tokenizados. He points out that “both approaches offer different features and factors of safety (…) I am a big fan of Lightning Network, and I think that will become increasingly relevant in the trade“.

Olivia Lovenmark, a former member of BitGo and Thesis, it is also consistent in that both types of protocols off-chain are important:

“The protocols tokenizados as tBTC and wBTC may be more attractive, since the spread of financial options from a holder of Bitcoin, while the protocols without a token, like Lightning, in general, improve the infrastructure of the network“.

In addition, several equity analysts insist that there is an interest in creating and obtain more advanced features that may not be achievable in the Blockchain of Bitcoin. Also, one of them is Jack Purdy, financial analyst decentralised Messari:

“Ethereum has built a set of incredibly diverse financial applications (…) This is just the beginning, we will see many more use cases while the market for Bitcoin in Ethereum continues to grow.“

How this is beneficial for Bitcoin?

In effect, whether in Ethereum or Bitcoin, it is clear that the recent growth of such protocols suggests that the users want to operate on Bitcoin.

According to Christian Decker, engineer and researcher in Blockstream (the company that launched Liquid Network) “the interest in using Bitcoin in other Blockchains is a strong sign that the interest in it is increasing“.

And you, do you agree with the benefits? What would you give a chance to the platform Ethereum? Déjanoslo know in the comments box.

Did you like the content? Share it

Cryptocurrency Market