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The article talks about Dapps and decentralized finance, but WBTC is centralized and managed by a custodians. Sure you could use it in your smart contract, but

The article talks about Dapps and decentralized finance, but WBTC is centralized and managed by a custodians. Sure you could use it in your smart contract, but it has the same kind of risks as using Tether. I think it can be dangerous to build layers of decentralized apps on top of something that's not. (Or maybe I'm not understanding it correctly)

AgentME 8y ago
It's technically possible to implement this in a trustless decentralized way: https://en.bitcoin.it/wiki/Atomic_swap https://en.bitcoin.it/wiki/Atomic_swap. I can't tell if this does it that way or in a centralized way though.
- dangero 8y ago
  Atomic swaps don't make WBTC feasible in a trustless decentralized fashion. The swap itself is only a very small part of the problem. The article states they are using custodians to hold Bitcoins.
  - askmike 8y ago
    You can lock bitcoin up inside the BTC mainchain by using certain OP codes. This allows you to create a sidechain. For example Liquid does this: https://blockstream.com/liquid/ https://blockstream.com/liquid/
    - LowLevelHacker 8y ago
      Liquid is essentially a "2nd layer" pyramid scheme run by the absolute fraud of a company that is Blockstream. Adam Back has done more to kill decentalized digital cash than any other single person.
    - dangero 8y ago
      Liquid holds btc using multisig not just OP codes.
leppr 8y ago
This touches on an open question and design challenge in the crypto field: - How to programmatically/formally measure/characterize decentralization ? - How to show the decentralization level of a particular dApp function execution to the user ? In that case, a contract could be totally decentralized but the monetary value part of WBTC is external and centralized. That could be potentially very confusing and unexpected for a user if the WBTC redeeming process ultimately fell through, and they may come to blame other unrelated parts of the process.
tmlee 8y ago
I would say that this is a good start. Another good asset backed token that is aiming towards decentralization would be MakerDAO and DAI DAI is the USD stablecoin, overcollateralized by ETH and a variety of other ERC-20 tokens. And managed in a decentralized manner by MakerDAO token holders. A good experiment to watch imo

AgentME 8y ago

It's technically possible to implement this in a trustless decentralized way: https://en.bitcoin.it/wiki/Atomic_swap https://en.bitcoin.it/wiki/Atomic_swap. I can't tell if this does it that way or in a centralized way though.

dangero 8y ago
Atomic swaps don't make WBTC feasible in a trustless decentralized fashion. The swap itself is only a very small part of the problem. The article states they are using custodians to hold Bitcoins.
- askmike 8y ago
  You can lock bitcoin up inside the BTC mainchain by using certain OP codes. This allows you to create a sidechain. For example Liquid does this: https://blockstream.com/liquid/ https://blockstream.com/liquid/
  - LowLevelHacker 8y ago
    Liquid is essentially a "2nd layer" pyramid scheme run by the absolute fraud of a company that is Blockstream. Adam Back has done more to kill decentalized digital cash than any other single person.
  - dangero 8y ago
    Liquid holds btc using multisig not just OP codes.

leppr 8y ago

This touches on an open question and design challenge in the crypto field: - How to programmatically/formally measure/characterize decentralization ? - How to show the decentralization level of a particular dApp function execution to the user ? In that case, a contract could be totally decentralized but the monetary value part of WBTC is external and centralized. That could be potentially very confusing and unexpected for a user if the WBTC redeeming process ultimately fell through, and they may come to blame other unrelated parts of the process.

tmlee 8y ago

I would say that this is a good start. Another good asset backed token that is aiming towards decentralization would be MakerDAO and DAI DAI is the USD stablecoin, overcollateralized by ETH and a variety of other ERC-20 tokens. And managed in a decentralized manner by MakerDAO token holders. A good experiment to watch imo