Is it possible to create e.g. a Bitcoin asset for Ethereum, then transfer real Bitcoins to it and back to the Bitcoin network? Once it is an asset on Ethereum, a contract based currency exchange could be implemented, without any need for a central server.
I think this could be implemented with
proof-of-burn: On the Bitcoin blockchain, send it to an unspendable address. On the Ethereum side, tell a contract the address and sign a message with it. The message could be the asset address where the bitcoin is sent to. This might work without modifications of the Bitcoin and Ethereum network and clients, but to validate this, maybe this would mean that every server which runs a ethereum node bitcoin node needs to run a bitcoin node, too, and some enhancements of the contract language.
The other way, from the Ethereum Bitcoin asset to the real Bitocoin network, would be more difficult. I guess it would require to implement some kind of special transactions, which checks proof-of-burn transactions on the Ethereum blockchain.
