The cryptocurrency Dogecoin was created as a joke but eventually found a purpose as a more friendly, approachable alternative to Bitcoin. The Dogecoin community has catapulted DOGE to cult status. Today it is often used as an entry-point into the crypto world. Dogecoin is a cryptocurrency based on Luckycoin (which is, in turn, based on Litecoin). Dogecoin was originally designed to be a more approachable alternative to Bitcoin, Litecoin, and other cryptocurrencies. As such, there aren’t any groundbreaking features that set Dogecoin apart from the pack. The cryptocurrency hasn’t seen any major updates since 2015 (although it is able to benefit from improvements to the Litecoin code). The true value of Dogecoin lies in the strong and vibrant community that sprung up around it.
Six Interesting Facts About Dogecoin
Dogecoin was originally founded as the result of a joke made by Jackson Palmer in November 2013. When he was contacted by programmer Billy Markus, they decided to turn Dogecoin into a reality.
Dogecoin was designed to be a friendly, more approachable form of cryptocurrency that could reach users put off by the cold complexity of Bitcoin. Even its name is taken from a popular Internet meme.
Dogecoin has one of the largest and most active communities in the cryptocurrency world. This community has come together to fund a number of charitable efforts and other projects. They even managed to sponsor a NASCAR.
One of the most common uses for Dogecoin today is as a tipping service. Users will tip other users for posts or contributions that they believe deserve recognition. It’s similar to a “like” but with more impact.
There have been no technical updates or developments since 2015 when Jackson Palmer left the project by declaring that he was going on an “extended leave of absence”.
In 2021 Dogecoin saw a major price surge thanks to an influx of users chasing GME style highs. This run was given a further boost when Elon Musk began tweeting about Dogecoin, calling it the “cryptocurrency of the people”.
What’s Different About Dogecoin? The main thing that separates Dogecoin from most other cryptocurrencies is that it is an inflationary, rather than deflationary, cryptocurrency.
When a cryptocurrency, like Dogecoin, is inflationary, it means that there is no maximum limit to the number of coins in circulation. Bitcoin and many other cryptocurrencies are designed with a hard supply cap of coins. The potential problem with this is that once the cap is reached it may no longer be profitable for miners to continue to sustain the system. This would either lead to unacceptably high fees in order to encourage miners or very long transaction times as there would be no incentive to process network transactions.
Miners Are Rewarded With Dogecoin
Dogecoin’s creator sought to solve this problem by ensuring that miners would always be rewarded with new Dogecoin and so there would always be an incentive to mine more coins. An inflation-based approach was also designed to replace lost coins and keep Dogecoin at a stable 100 billion coins.
The value of Bitcoin broke all records in February 2021.
The spot price to buy a bitcoin — the world’s first and most popular digital currency — briefly rose above $58,000 on February 21. (For context, the cryptocurrency’s all-time low is from 2013, when it was priced at $67.81.) With such a meteoric rise, many are wondering: What, exactly, is Bitcoin, and where does it get its value? Years from now, will we talk about the Bitcoin boom and bust periods as we do about the Gold Rush? Or, will it become a staple in a diversified investment portfolio and a common way to buy a pizza?
For the most part, the jury’s still out. But the past 10 years have given us a better indication of the role Bitcoin might play in the portfolios of retail investors and large institutions alike.
Definition: What is Bitcoin?
Bitcoin was launched in 2009 and is regarded as the first cryptocurrency. It’s a decentralized form of digital cash that eliminates the need for traditional intermediaries like banks and governments to make financial transactions. Still feeling a little confused? Don’t worry, that’s normal.
Fiat money (like the U.S. dollars in your bank account) is backed and regulated by the government that issues it. Bitcoin, on the other hand, is powered through a combination of peer-to-peer technology — a network of individuals, much like the volunteer editors who create Wikipedia — and software-driven cryptography, the science of passing secret information that can only be read by the sender and receiver. This creates a currency backed by code rather than items of physical value, like gold or silver, or by trust in central authorities like the U.S. dollar or Japanese yen.
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party,” wrote Satoshi Nakamoto — the pseudonym of the mysterious Bitcoin creator, who remains unknown — in a white paper introducing the open-source technology. It’s come a long way since then, now accepted as payment by AT&T, the Dallas Mavericks and Wikipedia, among others.
Each bitcoin (trading symbol “BTC,” though “XBT” is also used) is a computer file stored in a digital wallet on a computer or smartphone. To understand how the cryptocurrency works, it helps to understand these terms and a little context:
Blockchain: Bitcoin is powered by open-source code known as blockchain, which creates a shared public ledger. Each transaction is a “block” that is “chained” to the code, creating a permanent record of each transaction. Blockchain technology is at the heart of more than 6,000 cryptocurrencies that have followed in Bitcoin’s wake.
Private and public keys: A bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.
Bitcoin miners: Miners — or members of the peer-to-peer platform — then independently confirm the transaction using high-speed computers, typically within 10 to 20 minutes. Miners are paid in bitcoin for their efforts.
Bitcoin value follows the law of supply and demand — and because demand waxes and wanes, there’s a lot of volatility in the cryptocurrency’s price.
Besides mining bitcoin, which requires technical expertise and an investment in high-performance computers, most people purchase bitcoins as a form of currency speculation — betting that the U.S. dollar value of one bitcoin will be higher in the future than it is today. But that’s difficult to predict.
Storing your bitcoins: Hot wallets vs. cold wallets
Bitcoins can be stored in two kinds of digital wallets:
Hot wallet: Digital currency is stored in the cloud on a trusted exchange or provider, and accessed through a computer browser, desktop or smartphone app.
Cold wallet: An encrypted portable device much like a thumb drive that allows you to download and carry your bitcoins.
Basically, a hot wallet is connected to the internet; a cold wallet is not. But you need a hot wallet to download bitcoins into a portable cold wallet.
Buying Bitcoin: The pros and cons
With a speculative asset class like bitcoin, it’s better to start with why you should be wary:
Bitcoin: The cons
Price volatility. The 2017 spike in Bitcoin’s price was driven by speculators rushing into the bitcoin market, as NerdWallet staff writers discussed at the time. The recent gains are good news if you bought Bitcoin in December 2018; those who bought in 2017 when Bitcoin’s price was racing toward $20,000 had to wait until December 2020 to recover their losses.
Hacking concerns. While backers say the blockchain technology behind bitcoin is even more secure than traditional electronic money transfers, bitcoin hot wallets have been an attractive target for hackers. There have been a number of high-profile hacks, such as the news in May 2019 that more than $40 million in bitcoin was stolen from several high-net-worth accounts on cryptocurrency exchange Binance (the company covered the losses).
Limited (but growing) use. In May 2019, telecommunications giant AT&T joined companies such as Overstock.com, Microsoft and Dish Network in accepting bitcoin payments. But these companies are the exception, not the rule.
Not protected by SIPC. The Securities Investor Protection Corporation insures investors up to $500,000 if a brokerage fails or funds are stolen, but that insurance doesn’t cover cryptocurrency.
Bitcoin: The pros
Private, secure transactions anytime — with fewer potential fees. Once you own bitcoins, you can transfer them anytime, anywhere, reducing the time and potential expense of any transaction. Transactions don’t contain personal information like a name or credit card number, which eliminates the risk of consumer information being stolen for fraudulent purchases or identity theft. (Keep in mind, though, that to purchase bitcoins on an exchange, generally you’ll first need to link your bank account.)
The potential for big growth. Some investors who buy and hold the currency are betting that once Bitcoin matures, greater trust and more widespread use will follow, and therefore Bitcoin’s value will grow.
The ability to avoid traditional banks or government intermediaries. After the financial crisis and the Great Recession, some investors are eager to embrace an alternative, decentralized currency — one that is essentially outside the control of regular banks, governing authorities or other third parties. (However, to buy Bitcoin on an exchange with U.S. dollars, you’ll likely need to link your bank account.)
Where can I buy Bitcoin?
There are four ways to get bitcoins:
Cryptocurrency exchanges. There are a number of exchanges in the U.S. and abroad. Coinbase is the largest cryptocurrency exchange in the U.S., trading more than 30 cryptocurrencies.
Investment brokerages.Robinhood was the first mainstream investment broker to offer Bitcoin and other cryptocurrencies (Robinhood Crypto is available in most, but not all, U.S. states). Tradestation, eToro and Sofi Active Investing also offering cryptocurrency trading in most U.S. states.
Bitcoin ATMs. There are more than 7,000 bitcoin ATMs in the U.S. (search Coin ATM Radar to find one near you).
Peer-to-peer purchases. True to its original spirit, you can buy bitcoins directly from other bitcoin owners through peer-to-peer tools like Bisq, Bitquick and LocalBitcoins.com.
Bitcoin mining. You can earn bitcoins through mining, but the technical expertise required and computer cost puts this option out of reach for most.
Should you buy Bitcoin?
Bitcoin is an incredibly speculative and volatile buy. It’s worth remembering that stock trading can give you a similar thrill — and picking stocks of established companies is generally less risky than investing in Bitcoin. (A good rule of thumb is to devote less than 10% of your overall portfolio to individual stocks or speculative assets like Bitcoin.)
Imagine that you need to sell a house. It’s a rather complicated and daunting process which entails a lot of paperwork, communication with different firms and people as well as a high levels of various risks. That’s why the absolute majority of house sellers decide to find an estate agent, who deals with all the paperwork, markets the property and acts as an intermediary when the negotiations begin, overseeing the deal until it’s closed.
Moreover, the agency provides an escrow service, which is especially useful in such transactions, as the sums involved are normally quite big and you can’t really fully trust the person you will be dealing with. Nevertheless, after the successful deal, the seller’s and the buyer’s agents will share around seven percent of the sale price as their commission. This amounts to quite a substantial financial loss for the seller.
It’s situations like this where smart contracts could really come in handy and effectively revolutionize an entire industry, all the while making the process a lot less of a burden. Perhaps most importantly, they would solve a trust issue. Smart contracts work on an ‘If-Then’ principle, which means that the ownership of the house will be passed on to the buyer only when the agreed upon amount of money is sent to the system.
They also work as escrow services, meaning that both the money and the ownership right will be stored in the system and distributed to the participating parties at exactly the same time. Moreover, the transaction is witnessed and verified by hundreds of people, so the faultless delivery is guaranteed. As trust between the parties is no longer an issue, there is no need for an intermediary. All the functions that an estate agent does can be pre-programmed into a smart contract, while simultaneously saving both the seller and the buyer considerable amounts of money.
And this is just one example of potential uses of smart contracts. They are capable of facilitating an exchange of money, property and anything else of value, ensuring the complete transparency, avoiding the services and accompanying charges of a middleman and eradicating the question of trust between the parties. The code of a particular smart contract includes all the terms and conditions agreed upon by the parties, and the information about the transaction itself is recorded in a Blockchain, a decentralized, distributed public ledger.
How do smart contracts work
Simply put, smart contracts work a lot like vending machines. You just drop a required amount of a cryptocurrency into the smart contract, and your escrow, house ownership right, driver’s license, or whatever else drops into your account. All the rules and penalties are not only pre-defined by smart contracts but are also enforced by them.
Interdependence
A smart contract can work on its own, but it can also be implemented along with any number of other smart contracts. They can be set up in a way when they’ll be dependant on one another. For example, successful completion of one particular smart contract can trigger the start of another one, and so on. In theory, whole systems and organizations can run entirely on smart contracts. To some extent, this is already implemented in various cryptocurrency systems, where all the laws are pre-defined and because of that, the network itself can function autonomously and independently.
Objects of smart contracts
Essentially, there are three integral parts, also referred to as objects, to every smart contract. The first one is signatories, the two or more parties using the smart contract, agreeing or disagreeing with the terms of the agreement using digital signatures.
The second object is thesubject of the agreement. This can only be an object that exists within the smart contract’s environment. Alternatively, the smart contracts have to have unhindered and direct access to the object. Even though the smart contracts were first discussed back in 1996, it was this particular object that stalled their development. This problem was partially solved only after the first cryptocurrency appeared in 2009.
Finally, any smart contract has to include specific terms. Those terms need to be mathematically described in full and using a programming language that is appropriate for the particular smart contract’s environment. This includes the requirements expected from all the participating parties as well as all the rules, rewards and punishments associated with said terms.
Environment
In order for them to exist and function properly, smart contracts have to operate within a specific suitable environment. First of all, the environment needs to support the use of public-key cryptography, which enables users to sign off for the transaction using their unique, specially generated cryptographic codes. This is the exact system that the absolute majority of currently existing cryptocurrencies is using.
Secondly, they require an open and decentralized database, which all parties of the contract can fully trust and which are fully automated. Moreover, the entire environment itself has to be decentralized for the smart contract to be implemented. Blockchains, especially the Ethereum Blockchain, are the perfect environments for smart contracts.
Finally, the source of digital data used by the smart contract has to be completely reliable. This entails the use of root SSL security certificates, HTTPS, and other secure-connection protocols that are already being widely used and are being implemented automatically on most modern-day software.
Smart contracts give you:
Autonomy — Smart contracts eradicate the need for a third-party intermediary of facilitator, essentially giving you full control of the agreement.
Trust — No one can steal or lose any of your documents, as they are encrypted and safely stored on a secured, shared ledger. Moreover, you don’t have to trust people you’re dealing with or expect them to trust you, as the unbiased system of smart contracts essentially replaces trust.
Savings — Notaries, estate agents, advisors, assistance and many other intermediaries are not needed thanks to smart contracts. And, by extension, the extortionate fees associated with their services.
Safety — If implemented correctly, smart contracts are extremely difficult to hack. Moreover, perfect environments for smart contracts are protected with complex cryptography, which will keep your documents safe.
Efficiency — With smart contracts you will be saving a lot of time, normally wasted on manually processing heaps of paper documents, sending or transporting them to specific places, etc.
Smart contracts were first described by Nick Szabo, a computer scientist and cryptographer, in 1996. Over the course of several years, Szabo reworked the concept and released several publications, where he described the concept of establishing contract law related business practices through the design of electronic commerce protocols between strangers on the Internet.
However, the implementation of smart contracts didn’t happen until 2009, when the first cryptocurrency Bitcoin appeared along with its Blockchain, which finally provided a suitable environment for smart contracts. Interestingly enough, Nick Szabo designed a mechanism for a decentralized digital currency called Bit Gold in 1998. It was never implemented, but it already had many of the features that Bitcoin boasted about 10 years later.
These days, smart contracts are mainly associated with cryptocurrencies. Moreover, it is fair to say that one could not exist without the other, and vice versa, as decentralized cryptocurrency protocols are essentially smart contracts with decentralized security and encryption. They are widely used in most of the currently existing cryptocurrency networks and are the prominent and one of the most hyped features of Ethereum.
Read more: What is Ethereum
Examples of using smart contracts
While the stance of governments, financial regulators and banks worldwide on cryptocurrencies has been ranging from extremely cautious to carefully accepting, the technology behind them – Blockchain and smart contracts – has been widely accepted as revolutionary and it is being implemented across all levels.
For example, just recently, the Depository Trust and Clearing Corporation (DTCC) and four major banks – Bank of America Merrill Lynch, Citi, Credit Suisse and J.P. Morgan – successfully traded credit default swaps on the Blockchain developed by Axoni, using smart contracts. The smart contract used held information such as individual trade details and counterparts risk metrics, which, according to a press release, provided a new level of transparency for partners and regulators.
Similar things are happening everywhere. This month, a consortium of 61 Japanese and South Korean banks has been testing Ripple’s Blockchain and smart contracts to enable cross-border money transfers between the two nations. The new system will roll-out in 2018. Even Sberbank, a Russian government-controlled bank, in a country which has been notoriously anti-cryptocurrency, the Ethereum’s Blockchain and the smart contracts enabled by it are being tested.
The tests came in light of Sberbank joining the Enterprise Ethereum Alliance, a consortium of more than 100 businesses, including top players such as Cisco, BP, ING, Microsoft and so on. The Alliance aims to develop a Blockchain fine-tuned for business-use, where smart contracts needed for particular companies can be developed and implemented.
As smart contracts were developed in association with cryptocurrencies, they are still mostly being implemented into the world of finance and banking. Nevertheless, this technology can be used by governments worldwide to make the voting system more accessible and transparent. Supply chains can use it to both monitor the goods and automate all the tasks and payments involved. Real estate, healthcare, taxes, insurance and countless other industries can benefit from the implementation of smart contracts and the benefits they have to offer.
Cons
Smart contracts are an extremely young technology. Despite having a lot of promise, it is still can be prone to problems. For instance, the code that makes up the contract has to be perfect and contain no bugs. This can lead to mistakes and, sometimes, to such bugs being exploited by scammers. As was the case with The DAO hack, money put into a smart account with a mistake in its code can be stolen from it.
Moreover, the novelty of the technology still bring a lot of questions to the table. How will the government decide to regulate such contracts? How will they be taxed? What happens if the contract can’t get access to the subject of the agreement, or anything unexpected happens to it? It this was to happen when a traditional contract was made, it could be rescinded in court, but the Blockchain makes the contract perform no matter what, in accordance with the ‘Code is Law’ policy.
Nevertheless, most of these problems exist purely because of how young smart contracts are as a technology. With such promise, the technology will surely be perfected over time. Undoubtedly, smart contracts are about to become the integral part of our society.
Non-fungible tokens (NFT) are digital assets that represent a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate and even digital sneakers.
One of the main benefits of owning a digital collectible versus a physical collectible like a Pokemon card or rare minted coin is that each NFT contains distinguishing information that makes it both distinct from any other NFT and easily verifiable. This makes the creation and circulation of fake collectibles pointless because each item can be traced back to the original issuer.
Unlike regular cryptocurrencies, NFTs cannot be directly exchanged with one another. This is because no two NFTs are identical – even those that exist on the same platform, game or in the same collection. Think of them as festival tickets. Each ticket contains specific information including the purchaser’s name, the date of the event and the venue. This data makes it impossible for festival tickets to be traded with one another.
The vast majority of NFT tokens were built using one of two Ethereum token standards (ERC-721 and ERC-1155) – blueprints created by Ethereum that enable software developers to easily deploy NFTs and ensure they’re compatible with the broader ecosystem, including exchanges and wallet services like MetaMask and MyEtherWallet. Eos, Neo and Tron have also released their own NFT token standards to encourage developers to build and host NFTs on their blockchain networks.Read more: Do You Know Where Your Digital Art Lives?
Other key characteristics of NFTs include:
Non-interoperable: A CryptoPunk cannot be used as a character on the CryptoKitties game or vice versa. This goes for collectibles such as trading cards, too; a Blockchain Heroes card cannot be played in the Gods Unchained trading-card game.
Indivisible: NFTs cannot be divided into smaller denominations like bitcoin satoshis. They exist exclusively as a whole item.
Indestructible: Because all NFT data is stored on the blockchain via smart contracts, each token cannot be destroyed, removed or replicated. Ownership of these tokens is also immutable, which means gamers and collectors actually possess their NFTs, not the companies that create them. This contrasts with buying things like music from the iTunes store where users don’t actually own what they’re buying, they just purchase the license to listen to the music.
Verifiable: Another benefit of storing historical ownership data on the blockchain is that items such as digital artwork can be traced back to the original creator, which allows pieces to be authenticated without the need for third-party verification.
Why they’re important
NFTs have become hugely popular with crypto users and companies alike because of the way they revolutionized the gaming and collectibles space. Since November 2017, there has been a total of $174 million spent on NFTs.
Subscribe to The Node, our daily report on top news and ideas in crypto.
SUBSCRIBEBy signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.
Thanks to the advent of blockchain technology, gamers and collectors can become the immutable owners of in-game items and other unique assets as well as make money from them. In some cases, players have the ability to create and monetize structures like casinos and theme parks in virtual worlds, such as The Sandbox and Decentraland. They can also sell individual digitals items they accrue during gameplay such as costumes, avatars and in-game currency on a secondary market.
For artists, being able to sell artwork in digital form directly to a global audience of buyers without using an auction house or gallery allows them to keep a significantly greater portion of the profits they make from sales. Royalties can also be programmed into digital artwork so that the creator receives a percentage of sale profits each time their artwork is sold to a new owner.
William Shatner, best known as Captain Kirk from “Star Trek,” ventured into digital collectibles in 2020 and issued 90,000 digital cards on the WAX blockchain showcasing various images of himself. Each card was initially sold for approximately $1 and now provides Shatner with passive royalty income every time one is resold.Read more: NFT art sales reached all-time high of $8.2M in December
Why do they have value?
Like all assets, supply and demand are the key market drivers for price. Due to the scarce nature of NFTs and the high demand for them from gamers, collectors and investors, people are often prepared to pay a lot of money for them.
Some NFTs also have the potential to make their owners a lot of money. For instance, one gamer on the Decentraland virtual land platform decided to purchase 64 lots and combine them into a single estate. Dubbed “The Secrets of Satoshis Tea Garden,” it sold for $80,000 purely because of its desirable location and road access. Another investor parted with $222,000 to purchase a segment of a digital Monaco racing track in the F1 Delta Time game. The NFT representing the piece of digital track allows the owner to receive 5% dividends from all races that take place on it, including entry ticket fees.
What are the most expensive NFTs?
Dragon the CryptoKitty continues to be one of the most expensive NFTs in the space, valued at 600 ETH.
The one-of-a-kind “1-1-1” race car from F1 Delta Time sold for 415.9 ETH in May 2019.
Alien #2089 sold for 605 ETH in January 2021. This NFT is part of the CryptoPunk collection, the first NFTs ever created. Overall, there are 10,000 different CryptoPunks and only nine Alien CryptoPunks.
An NBA Topshot digital collectible card of basketball star LeBron James sold for $100,000.
An Axie named Angel from the NFT-based game Axie Infinity sold for 300 ETH.
Decentralized finance (DeFi) platforms are built on Ethereum, but Bitcoin holders are getting involved by “locking up” their coins.
Bitcoin DeFi involves locking Bitcoin into smart contracts that give them Ethereum-based tokens that represent the biggest cryptocurrency by market cap.
By locking up their Bitcoin on Ethereum, Bitcoiners are using DeFi to generate passive income.
world, with billions of dollars having been invested in DeFi products in 2020 alone.
Increasingly, Bitcoin holders are getting involved in DeFi by “locking up” their coins in exchange for tokens that can be used on DeFi platforms.
What is DeFi?
DeFi products are tools built predominantly on Ethereum
that aim to revolutionize and replace the current methods of borrowing, lending and banking as seen with traditional finance.
The aim of DeFi is to make the world of finance available to all (or to anyone who has an Internet connection).
Why would Bitcoin be involved?
The majority of DeFi platforms are built on Ethereum. But there are a lot of people who own a lot of Bitcoin
who want to get involved too. So it is becoming increasingly easy for those with Bitcoin to be able to invest in DeFi platforms with their funds.
Bitcoin is the biggest cryptocurrency by market cap, so it makes sense for things to be moving in a direction that links the asset with DeFi products.
How does Bitcoin DeFi work?
Bitcoin DeFi works by basically allowing Bitcoin—a currency on one blockchain—to run on Ethereum’s very different, separate blockchain.
How? This is where things get a little complex.
You can’t use Bitcoin directly on Ethereum platforms—as mentioned before, the blockchains are different. In order to do so, the Bitcoin needs to be converted into a currency that represents Bitcoin but is really an Ethereum-based token.
2) Wrapped Bitcoin (WBTC) is the first ERC20 token backed 1:1 to Bitcoin. It’s aiming to bring the representative and new use-cases of Bitcoin into Ethereum blockchain. pic.twitter.com/NtaKbZvsdm
Then, the Bitcoin is essentially locked into a smart contract
, (a piece of code that performs instructions to replicate agreements) and can be used on the network. Think of it like a swap.
Using Bitcoin DeFi to generate passive income
Why would someone want to put their Bitcoin in Ethereum smart contracts, you might ask, when they could just buy Ethereum tokens directly and get started from there?
Besides, there are many other cryptocurrencies that serve that purpose now, some argue. So when Bitcoin is just sitting there as an investment in the hope that its value will one day skyrocket, why not use it to make money for you in the meantime?
One of the ways to generate passive income with Bitcoin is to utilize a DeFi platform to lend and earn interest with Bitcoin that would otherwise just be sitting around. It works like this: convert the Bitcoin into Ether or directly into Dai (a stablecoin, pegged to the US dollar) and put it in a platform where you could lend it out and receive loan back with interest.
One way of doing this would be to use the MakerDAO platform.
Who is leading the Bitcoin DeFi space?
A relatively new concept, there are a handful of companies currently leading this space. They include Wrapped Bitcoin (WBTC), RenVM, and RSK.
🤝 WBTC is a centralized collaboration between several DeFi protocols, including Maker, Compound, Kyber Network and Aave, among others. It works to lock Bitcoin on the Ethereum blockchain in exchange for ERC-20 tokens of the same value.
🖧 RenVM is a network that holds Bitcoin (among other cryptocurrencies) and mints a representation of that currency as an ERC-20 token.
🏦 Global lending platform RSK works to help its users earn interest with their Bitcoins by converting them into a stablecoin before lending them out.
What does the future hold for Bitcoin DeFi?
Right now, more Bitcoin than ever before is being sent over to Ethereum; nearly $1 billion worth, as of September 2020. This is undoubtedly due to the rise of DeFi. As the scene has grown in popularity, so have the methods of making Bitcoin run on such platforms.
As long as DeFi is popular, we will continue to see new companies work in this space to provide quick, easy and cheap ways to help Bitcoin work on DeFi platforms.