Hey Jessatoshis
Tokenisation has truly taken the blockchain space by storm, believe it or not, but you can actually have a blockchain without a token, but the two have been seen as one due to the success of Bitcoin. Eventually, however, public and private blockchains will find out they don't need to use a native token in EVERY use case, and the primary token of value, that is, Bitcoin, is more than enough.
Look, I get it tokenisation is trendy, it's expensive, it's cool, and it's fun to mess around making your own money and configuring the ruleset. Not all rulesets are viable, and therefore many tokens will die along with the half-arsed projects they were backing.
Bitcoin the asset is not Bitcoin the network
Bitcoin the asset and Bitcoin the chain are still firmly paired with one another for now, but it won't always be the case, the chain and the network serve one purpose, but the digital asset will serve many other purposes. Purposes that means it will need to leave its native blockchain if it's going perform new functionality the native chain cannot provide.
Now, this brings its own can of worms such as security threats and loss of coins, but that comes with moving further out the risk curve. The only reason anyone would want to pull Bitcoin off the main-chain is that they're looking to leverage it in a way that kicks off a higher return.
In doing so, you also accept the higher risk that comes along with leaving the native chain.
Leaving the main chain
Bitcoin can be moved off the main chain in several ways, and I am sure there will be more in the future.
- The primary ways of now are via side chains such as the liquid network and lightning network.
- The second would be to wrap Bitcoin in a smart contract and get a representative token issued on another blockchain.
There currently 18,646,350 BTC minted and in circulation, but that's not to say all that BTC is actually sitting on the main chain.
Liquid
The liquid network, which is run by Blockstream and a federation of exchanges to make it easier to move BTC around in large volumes for low fees, currently holds 54 BTC according to Liquid Horse
Lightning
Lightning Labs, which launched the lightning network as a way for individuals to transfer satoshis at high speed and low cost via payment channels, seem to have faired a bit better in attracting liquidity.
There currently over 1100 BTC sitting on payment channels in the lightning network as of 2020
wBTC
wBTC is a grouped term for any BTC that is minted as a native token on another blockchain. The primary minting happens on Ethreeum, but it can also be done on other blockchains like TRON and EOS.
According to the wBTC order book there are
- 124 669 WBTC sitting on Ethereum as wBTC with an ERC-20 token
- while 99 WBTC are sitting on Tron as a TRC-20 token.
Bitcoin is slowly but surely leaving its native chain and moving towards other chains to leverage its abilities like smart contracts, oracles and more.
I think this will be the norm; more Bitcoin will move to other chains, more Bitcoin will be locked up in second layers and bring stability to other chains.
Instead of dealing with a token that moves around too much, using BTC can make de-fi projects more attractive as they all compete on the same level with a single asset pegging them.
Dapps can be built on other chains and still leverage BTC as a payment method and so much more.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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