Wrapped Bitcoin (WBTC)
About Wrapped Bitcoin (WBTC)
Wrapped Bitcoin is a token with the help of which all the coin holders can transact on the Ethereum blockchain network. With its help, you can easily learn about Bitcoin’s value.
The Wrapped Bitcoin is interoperable with all other applications built or based on the Ethereum network. The coin was released in 2019 to track the value of the real Bitcoin. So, you can say that the token value of wBTC is linked with the value of real BTC.
Ethereum and Bitcoin both follow different protocols, and because of this, the blockchain upon which they are based or run cannot communicate with each other. So, different currencies, including the wBTC, are created to resolve this issue.
Consequently, the coin holders can wrap their BTC and create a token compatible with the protocol of Ethereum. So they can transact and communicate regardless of the different protocols.
How Does Wrapped Bitcoin Work?
Wrapping Bitcoin or any other currency makes it compatible with the ERC-20 tokens, which run on the Ethereum blockchain network. You can mine the wrapped coin in three different ways. The working of the wBTC can be explained with the help of the following three steps:
Step 1: Receiving
To receive the wBTC, the user will send the request for a token to a merchant. After receiving the request, the merchant performs all the required AML or KYC procedures and verifies the user’s identity.
Once this verification process is done, the merchant and user execute their swap. So, as a result, the Bitcoin is transferred from the user to the merchant, and wBTC is transferred from the merchant to the user.
Step 2: Minting
Minting is the next step, where the new wrapped tokens are created. In the wrapped framework, the merchant starts the minting process while the custodian performs it.
Step 3: Burning
Burning is the last step which is the redeeming of BTC occurs for the wBTC tokens. Remember that only merchant addresses can do this action. The amount burnt is deducted from the wBTC balance of the merchant, and the supply of wBTC is reduced as a consequence.
As you know, the wrapped tokens show the cryptocurrency on another blockchain, and you can use them as such while the cost of the wrapped token is pegged to the original. The wBTC is based on the Ethereum token.
It represents the Bitcoin on the Ethereum Bitcoin. You can say that it is not a BTC but another ERC-20 token designed to track the value of BTC.
How to Buy Wrapped Bitcoin (WBTC)?
If you want to buy the wBTC but are unsure how to buy them, worry not. Below is the step-by-step guide to let you know how to buy the wrapped Bitcoin:
Create Your Account
Your account is the gateway to purchasing cryptocurrency. So, first of all, you will create an account. For account creation, you will need an ID card as proof of your address which will be used to process the transactions.
So, when you are creating the account, make sure that you have one. The ID verification can take some time, so there is no need to get stressed waiting for the process to complete.
Add The Payment Method
At this step, you will tap on the payment method box to add the payment method. Here, you can use a debit card or a bank account or initiate the wire per your needs.
Start Trading
Now, you are ready to sell and buy the wBTC. So, start trading!
Select The Wrapped Bitcoin From The List Of Assets
You can search and choose the wrapped BTC easily. For this purpose, you will search for the coin in the search bar and then select it to open the purchase screen.
Now, Enter The Amount You Need To Purchase
Here, you will have to add the amount you are willing to spend in your local currency. The amount will be converted to the wBTC per the coin’s current value. So, here you can get an idea about the Wrapped Bitcoin price. The Wrapped Bitcoin price USD is tracked live on several resources, the same as stock prices. So, if your local currency is USD, all you have to do is to go there and see how much you should pay to get 1 wBTC.
Whenever you buy the coin, don’t forget to check the Wrapped Bitcoin price today. You can get to know how much you spend buying the wBTC. You must keep checking the rise or fall in the price of Wrapped Bitcoin. For this purpose, you can easily check the graph to understand the price history.
Finalize The Purchase Of WBTC
When you have checked the current Wrapped Bitcoin price or price now and know how much you will spend, tap on the preview buy option. In this way, you will get the details of your purchase and when you are satisfied, confirm your purchase by clicking on the buy now!
Note: You can get a clear picture when you buy or sell the coin, convert the Wrapped Bitcoin to USD, or vice versa. Through this conversion, you can clearly understand your profit and loss.
FAQ
The wrapped currencies are pegged to the value of other original cryptocurrencies or assets such as stocks, shares, gold, or real estate. The original asset is wrapped into the digital wallet, and the newly minted token is created and transacted on the other platforms.
The wrapped tokens let the non-native tokens be utilized on other blockchains, and you can also use them to build bridges between different networks. The wrapped coins represent everything, including the arts, crypto assets, stocks, and equity and fiat currencies.
