Bitcoins tokenized faster than they are being mined

[fiulpro]

According to the reports the Bitcoins are tokenized faster than they are being Mined .
Let us go by some things first :

What is Tokenization?
In simple words token can represent a Tradable and Transferrable value that is acceptable and interchangeable. For example one token might mean 10 BTC , or maybe 15 BTC , so when you exchange the token or use it , you are entitled to use them.
There are many ICO's that also gives tokens to the participants, concept is same.




What is Minted Bitcoins?
When someone does solve the block , they do have the opportunity to actually transfer the reward into an address of their own choice , but first they have to show POW , proof of work , this way they are more like Virgin Bitcoins.

What is wrapped BTC?
It's nothing but ERC20 tokens representing the exact amount of Bitcoins which enables fast transition of ERC20 to BTC . According to the team they are the

first ERC20 token backed 1:1 with Bitcoins

Now let's focus on the article: 
https://www.coindesk.com/wrapped-bitcoin-tokenized-faster-mined-defi

Since Sunday, 1,043 more bitcoins were tokenized through Wrapped Bitcoin than were actually created by bitcoin miners as the Ethereum-based decentralized finance (DeFi) boom shows no signs of abating.

WBTC being created more than the Bitcoins themselves does prove that people are using them more in the market , maybe for the smart contracts and other options that ERC20 does have to offer , not like BTC does not have that but it's harder ..

About 900 bitcoins are mined per day, given the current issuance rate of 6.25 bitcoins minted per block and the target 10-minute block time.

At last check, nearly 31,000 bitcoins have been tokenized on Ethereum, according to Dune Analytics, 75% of which were minted by Wrapped Bitcoin (WBTC).

Ethereum’s supply of tokenized bitcoins hovered below 3,000 until mid May when the rate of new tokens shot up.

The rate of bitcoin tokenization signals the surging demand to use bitcoin in the burgeoning network of Ethereum-based DeFi applications.

“WBTC continues to exhibit strong growth as demand for bitcoin in DeFi has exploded,” said Kyle Davies, co-founder of Three Arrows Capital, in a private message with CoinDesk. “I expect this trend to continue,” he added.

First thing , it's not Bitcoins but at the end of the day , it's supported by Bitcoins , it's backed by Bitcoins this does mean Bitcoins and ERC20 tokens have integrated themselves in a much mutualistic way . This does mean they are supporting each other and we should expect people to get involved with WBTC more.

It's been expected to be a first class asset in some years .

What are your views ?
Have you ever owned and used WBTC?

[kryptqnick]

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

[GeorgeJohn]

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

Bro,I want to really know how bitcoin token operates because i don't really know if their is any difference between bitcoin token and ETH token.

[DougM]

According to the reports the Bitcoins are tokenized faster than they are being Mined .
....
What are your views ?
Have you ever owned and used WBTC?

OMG how funny I just posted the same article and similar questions just minutes after you did!  I tried to delete mine, but I can't   
Maybe the moderators can delete it so we can consolidate this topic under your thread. I have very similar questions, but I will add them here to build on your thread:

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

[20kevin20]

I have actually considered doing this a while ago, but I gave up the thought. As far as I can tell, it's a centralized token.. right? What I was willing to do is transform my BTC into WBTC so that I could use it on decentralized ETH exchanges with other tokens to take in profits without having to worry about KYC and other stuff. I suspect other people have done the same - it's more convenient than having to be on two blockchains, I guess. Otherwise, I see no reason to use WBTC. Like, why use a "BTC replica" when you could use the real one instead?

[fiulpro]

According to the reports the Bitcoins are tokenized faster than they are being Mined .
....
What are your views ?
Have you ever owned and used WBTC?

OMG how funny I just posted the same article and similar questions just minutes after you did!  I tried to delete mine, but I can't   
Maybe the moderators can delete it so we can consolidate this topic under your thread. I have very similar questions, but I will add them here to build on your thread:

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

Oh am really sorry , you should not delete the question , keep it there , for the while you can watch this thread with me , it happens sometimes 😅 , sorry I was writing it for a while therefore should have again checked before posting.

Thank you for being so considerate.

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

Bro,I want to really know how bitcoin token operates because i don't really know if their is any difference between bitcoin token and ETH token.

It's nothing but BTC backed ERC20 , more like amount of ERC20 that will add up to 1 BTC being coupled together so that you can sell/buy very fast.

I've heard of this token before, and I immediately thought of how Tether was supposed to be backed up by USD 1:1. The same concerns apply here, and now there is evidence these concerns are not ungrounded. Claiming to claim that your token is backed by something is one thing, but actually backing it up means spending a lot of money in process which is not something a project would want to do out of good will if it's avoidable. And backing the tokens up less and less can work find as long as people trust in the token and in the back up part of the story. However, there always remains a risk of it collapsing if suddenly many people decide to drop their coins and get the real thing instead.

I do think for the future they might go into a mutualistic part since this time they are not completing they are helping each other and that's a fairly good thing , for the long run I do believe we will see many more tokens like this , since many of the ATH are dependent on BTC , with some you can only actually buy them using BTC itself.

Dump would mean bad for both and vice versa.

[Fundamentals Of]

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

This may have a good effect as this is not Bitcoin itself and therefore it may be faster and cheaper to make transactions with it. This is not so bad at all. If this trend continues and is received well by the crypto community, it might make Bitcoin just a reserve currency which backs certain tokens such as WBTC 1:1.

But the problem is that it may exceed the 1:1 backing of real Bitcoin. If a Bitcoin token is minted without the proper backing of a real Bitcoin, it might become just like fiat which is printed out of thin air, or USDT without a real USD behind it.

[joniboini]

I'm not following the whole process of minting the tokens but shouldn't there a process where the user that wants to mint WBTC have to send some bitcoins to some address? If that doesn't exist then the whole pegged token is dubious. If that process is indeed present, then I don't see why this this tokenization must be slower than the number of mined bitcoin per day. After all, anyone can just buy from the market, lock it and then get the pegged version in return.

[DougM]

I'm not following the whole process of minting the tokens but shouldn't there a process where the user that wants to mint WBTC have to send some bitcoins to some address? If that doesn't exist then the whole pegged token is dubious. If that process is indeed present, then I don't see why this this tokenization must be slower than the number of mined bitcoin per day. After all, anyone can just buy from the market, lock it and then get the pegged version in return.

https://wbtc.network/assets/wrapped-tokens-whitepaper.pdf

From the white paper the bitcoins are transferred from the merchant/customer to the 'custodian' who then mints a WBTC via a wrapped token contract.

Sequence of events for users to receive WBTC tokens
● User requests wrapped tokens from a merchant
● The merchant does the required AML, KYC procedures and gets identification information from the user
● The user and merchant perform an atomic swap, or use a trusted exchange with the merchant receiving Bitcoin and the user receiving WBTC

It can also be 'burned' to unmint and release the original BTC.

Sequence of events for burning WBTC tokens
● The merchant creates a burn transaction, burning X WBTC tokens
● Custodian waits for 25 block confirmations of the ETH transaction
● Custodian releases X BTC to the merchants Bitcoin address
● Custodian makes an ethereum transaction marking the burn request as completed

[DougM]

What are the implications of 'wrapped bitcoin' tokenization trend to BTC if this trend continues?
In particular, is it positive or negative to BTC in the short or long run?

This may have a good effect as this is not Bitcoin itself and therefore it may be faster and cheaper to make transactions with it. This is not so bad at all. If this trend continues and is received well by the crypto community, it might make Bitcoin just a reserve currency which backs certain tokens such as WBTC 1:1.

But the problem is that it may exceed the 1:1 backing of real Bitcoin. If a Bitcoin token is minted without the proper backing of a real Bitcoin, it might become just like fiat which is printed out of thin air, or USDT without a real USD behind it.

  Interesting, I didn't consider the transaction aspect. Would it have any liquidity impact that could increase the demand for 'raw' BTCs?  I guess technically the demand might be offset by the wrapped bitcoin via Ethereum ecosystem but it also makes more BTC virtually available to a wider customer base which should have a net effect of increasing demand right?

[hatshepsut93]

Why would anyone want to hodl an IOU for Bitcoin? It's a huge risk becaise there's so much that can go wrong here - hacks, bugs and other platform failures, and there's really no benefits here. Ethereum network fees are as high as Bitcoin's, so you won't save any money here. And merchant adoption of this Bitcoin token is nearly non-existent, so you'll find it very hard to actually spend. Lightning is a solution to transaction problems that doesn't have any of these drawbacks.

[DougM]

Why would anyone want to hodl an IOU for Bitcoin? It's a huge risk becaise there's so much that can go wrong here - hacks, bugs and other platform failures, and there's really no benefits here. Ethereum network fees are as high as Bitcoin's, so you won't save any money here. And merchant adoption of this Bitcoin token is nearly non-existent, so you'll find it very hard to actually spend. Lightning is a solution to transaction problems that doesn't have any of these drawbacks.

I completely agree yet there is not only a product, but also a demand for the product.  Can anyone explain the actual appeal?

[GreatArkansas]

I have never tried to use WBTC/wrapped BTC?
But the concept of it especially using the ERC20 under ethereum network is good, this can be reduced that traffic on Bitcoin network.
The only downside of it for me is being the non-transparent of it or some issue regarding the issuing of wrap BTC, like some hacks could happen or if the Ethereum network will fall, WBTC could be also affected since it is ERC20 and under on Ethereum network.

[hatshepsut93]

I completely agree yet there is not only a product, but also a demand for the product.  Can anyone explain the actual appeal?

There is demand because there's a lot of hype around DeFi, DAO, tokens and Ethereum ecosystem in general. Probably the most interesting use-case is lending - you can put your wrapper Bitcoin in a decentralized fund that will yield returns over time. But this too comes with a pretty big risk, because these funds are prone to hacking or just losing money due to certain trades. I'm staying away from this DeFi stuff, no matter how lucrative it looks.

[Velkro]

What is Tokenization?
In simple words token can represent a Tradable and Transferrable value that is acceptable and interchangeable. For example one token might mean 10 BTC , or maybe 15 BTC , so when you exchange the token or use it , you are entitled to use them.
There are many ICO's that also gives tokens to the participants, concept is same.

IMG OF SHITCOIN here

Have you ever owned and used WBTC?

Well another shiningans to promote some shitcoin.
If you are reading something and its hard to understand what author wanted to say, its a scam indication or in this example promoting shitcoin.

Dont fall for it, comparing something without value to Bitcoin because fancy words doesnt mean its real.
Stay away from altcoins = shitcoins because too many people got burn already.

Yes of course this time will be different, like communism someday will work (yeah )

[DougM]

Another related article:

https://news.bitcoin.com/onchain-data-shows-449m-worth-of-bitcoin-on-eth-eclipses-offchain-competitors/

Onchain analytics show the number of bitcoin (BTC) held on the Ethereum blockchain has been multiplying at an extremely fast rate since the end of May. On Sunday, August 16 there’s approximately 38,021 BTC on Ethereum or roughly $449 million stored in synthetic bitcoin protocols like Wbtc, Renbtc, Sbtc, and more.

The Wrapped Bitcoin (Wbtc) project has the most BTC locked into the system with 26,161 coins ($310M) in the framework.

Wbtc is by far the most popular synthetic bitcoin (BTC) on the market today. This is followed by Renbtc (7,721), Sbtc (1,793), Hbtc (1,310), Imbtc (988), Pbtc (48)

“Bitcoin is now an undeniable part of [decentralized finance] defi, with $420M USD of BTC on Ethereum, in one form or another,” the CTO at Ren Protocol told his 2,778 Twitter followers on Saturday. “In the last 24 hours, over $24M has been moved through Ren Protocol to be used to farm yield. Anyone not generating APY right now with their BTC is asleep.”

[OcTradism]

Because the confidence and believe in USDT decreased from their unclear financial reports, people lost their faith in USDT. Consequently, those companies try to use Bitcoin as collateral or as backed asset for their company trust. It is their strategies to build up their trust fastly. Bitcoin does not relate to them like past scam projects. They scam and people blamed on Bitcoin. Bitcoin is a scam. No it is not and never been a scam. Only projects or people use Bitcoin as a tool for their companies are scam and scammers.

[pooya87]

this is misleading as it has absolutely nothing to do with bitcoin and bitcoin is NOT being tokenized. your initial statement explaining "Tokenization" doesn't help either.
you see it is a free market and anybody can create an altcoin or a token on another platform and call it whatever they want and link it to whatever they want. and so far they have done this hundreds of times.

in simple terms WBTC is nothing more than another useless ethereum token and is the exact same scam as ICOs, IEOs, STOs, .... they just keep changing the name (currently called DeFi) and pull the same scam all over again.

Onchain analytics show the number of bitcoin (BTC) held on the Ethereum blockchain

this is wrong. there is no "bitcoin" held on any other chain because it makes no sense.
they can create any shitcoin they want and call it "bitcoin" or "bitcoin something" but that doesn't make it bitcoin. nor does it make any kind of connection between the two.

[leea-1334]

I am not sure I get what this means though, if people are buying tokens at ICOs,,, pooya above me is absolutely right. Are they not just buying tokens and not tokenizing their Bitcoin? I mean, I get it if I am putting my Bitcoin in an escrow to mine tokens maybe, sure, but if I buy something I am not turning my money into the thing I buy, I am exchanging it. Do you not think this is a bit misleading?

[davis196]

Tokenization was a thing back in 2017,when Bitcoin price was going to the moon,now the crypto market is slightly bullish and tokenization became trendy again.
When you see the word "token" in the whitepaper of any cryptocurrency startup project,just run away immediately.
I don't trust "assets",which are backed by other assets.If a financial asset has real value,there's no need for such "backing".The market decides whether or not some financial asset has value.