Expansion of Bitcoin use cases
The project “Dfinity”, which aims to build a world computer, officially launched its own token “ckBTC (Chain-Key Bitcoin)” backed 1:1 with the crypto asset (virtual currency) Bitcoin (BTC) on the 3rd. announced.
ckBTC is a token for utilizing Bitcoin on the blockchain network “Internet Computer (IC)”. On the IC, it is now possible to provide bitcoin currency pairs on DEX (distributed exchange), raise funds with bitcoin, and send satoshi via chat on Web3’s SNS. Dfinity introduces the uses.
📢#ckBTC is now fully released 👏
Proposals 115468, 115470 & 115473 have been adopted with flying colors. Many thanks to all #ICPeople who voted manually to make this happen 🙏
— DFINITY (@dfinity) April 3, 2023
connection: What is Dfinity (ICP) that even beginners can understand | Explanation of mechanism and features
What is satoshi
The smallest currency unit of Bitcoin (0.00000001 BTC = 1 Satoshi). The name comes from Satoshi Nakamoto, an unidentified person or group of people who are authors of Bitcoin technical papers.
At the beginning of the announcement, Dfinity explained that 2022 has been a tough year for DeFi (decentralized finance) and bridges. The cross-chain bridge was targeted by hackers, pointing out the problem that centralized storage where users’ assets are stored.
In light of these challenges, ckBTC is designed to be differentiated from existing solutions such as bridges and wrapped tokens. Since November 2022, the IC will be able to connect with the Bitcoin blockchain without a bridge or intermediary. Dfinity described the current situation as “IC and Bitcoin are seamlessly connected as if they were one blockchain”.
What is a wrapped token
An alternative token for using cryptocurrencies on another blockchain. Basically, the price is tied to the original virtual currency.
As such, the issuance and redemption of ckBTC does not require any bridges, traditional cloud service providers or centralized custodians. It also states that anyone can issue and redeem tokens in a verifiable state.
Another feature of ckBTC is that it can be used with lower fees than Bitcoin. Dfinity explained that ckBTC is introducing Layer 2 features to lower fees, speed up processing, and improve scalability.
In addition, identity verification is required to issue and redeem ckBTC. This is to prevent bitcoins involved in crime from entering the IC.
connection: Dfinity Foundation announces ICP’s first decentralized exchange “Sonic”
Spread of use cases
Bitcoin has recently attracted attention for use cases other than payment methods and investments. As the credit risk to banks increases, the attractiveness as an asset is being recognized again, but in January this year, the Ordinals Protocol, which enables the creation of NFTs (non-fungible tokens), was launched, opening up new use cases. Interesting.
connection: Magic Eden expands in the Bitcoin version NFT “Ordinals” market
Also, last month, the asset price of Stacks (STX), which provides a smart contract layer for Bitcoin, soared. Stacks’ DeFi ecosystem stocks have also risen across the board, and with the use cases of Bitcoin being reviewed, Stacks, which is used as a DeFi platform, has also gained attention.
connection: Bitcoin Layer 2 “Stacks (STX)” soars about 6 times since the beginning of the year