So many thoughts on this.
1) it's awesome, congrats!
2) Bitcoin wants to be the money of the future, and it will be
3) Ethereum is the world computer for decentralized finance applications
4) ETH is money
The rest is noise https://t.co/4ZmaJALcLF
Personally, it seems to me that tBTC, WBTC, and any other custodial "Bitcoin on Ethereum" initiatives have a tendency to sound a lot more impressive and headline-friendly at first glance than their genuine potential actually warrants.
It's totally possible that one of these projects develops into a killer market offering or one of the building blocks thereof, but this article does a good job of putting into words the fundamental issue underneath these efforts. Then again, a disappointingly huge quantity of crypto is currently stored on totally-custodial and centrally-controlled trading exchanges right now, so it's pretty clear that things like tBTC offer a step in the right direction from that!
The point is not redeeming btc, but rather something that has constantly the same value of BTC so you can fold your btc and buy DAIBTC at a 1:1 ratio.
The CDP will always be in Ethereum, or multiple assets, but you'd always be able to swap your DAIBTC for BTC either through exchanges or through swapping services (at a cost, ofc)
Oh, I completely see the use case for a system like that but it's a matter of interoperability between BTC and Ethereum chains.
In your system I must place trust in an exchange to perform that swap from BTC to BTCDAI. Whereas in a system which is collateralised on both sides with BTC and ETH I don't as I can trustlessly go to the smart contract and pass in my eBTC and get BTC on the other chain.
Polkadot doesn’t actually do cross chain transactions with chains not built with their design goals in mind.
They are just using cross chain as a marketing ploy, in the end it’s a sharded ecosystem that only works (well) with chains explicitly build for it.
Don't think you can have a solution which doesn't give custody of your BTC to the vault because of its lack of smart contracts.
All you can do is ensure the vault has a sufficient bond of ETH on the other side to reimburse you with in the case of foul play.
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Bitcoin is the best money. Why would we want to tie it up on a joke platform with almost zero security compared to where it is now?
Read the spec. To make this work you have to put your bitcoins into a multisig wallet belonging to other people, and they give you an Eth token instead with a "soft peg" to the fair market value of bitcoin. This value is then maintained in part by paying money to a federation. It's a complete joke.
Page 9 looks pretty clear to me. "Send deposit to signing group" is the part where other people take your bitcoins. "Request TBTC" is the part where you get a stablecoin in return. No thanks; everybody's trying to get your bitcoins, and this is just the latest scheme to do so.
Use it in DeFi. Lend it at 4% interest in compound.finance while you hodl. Worried about a bug in a smart contract? Buy insurance coverage through https://www.nexusmutual.io/. Best money is no good if you don't use it.
> Lend it at 4% interest in compound
How about this: if you exchange your bitcoins for tBTCs you're already letting somebody else hold onto your coins, so if you're already willing to do that, why not put them on BlockFi and get 5% interest instead? Or any of the other interest-paying accounts.
> Best money is no good if you don't use it.
Everyone who has bitcoins uses it. They either save it (which is using it, despite what some Eth heads say), or they spend it, or they invest it. Giving it to someone else for the sake of a stablecoin on a joke platform like ethetheum is ridiculous.
Because you are not letting anyone hold your bitcoins. You retain the private keys on the Ethereum blockchain. This is a trustless way to move BTC to Ethereum. Tbtc has over collateralized eth backing it. But there is no point, you aren't open to understanding these things.
> Because you are not letting anyone hold your bitcoins.
You're handing them to the signing group in return for a stablecoin with a soft peg (and you have to pay a "custody fee" for the *privilege* of letting someone else hold your coins).
> This is a trustless way to move BTC to Ethereum.
It's a trustless way to give your bitcoins to someone else in return for something else.
> Tbtc has over collateralized eth backing it.
No thanks; eth is a centralized joke.