Coinbase Unveils cbBTC: A Wrapped Bitcoin Alternative for Base Blockchain
In a move that could potentially shake up the cryptocurrency market, Coinbase has announced the development of cbBTC, a wrapped bitcoin alternative designed to run on its own layer-2 blockchain, Base. This new initiative aims to provide users with a seamless way to access the largest cryptocurrency by market value on the network.
What is Wrapped Bitcoin?
For those unfamiliar, wrapping a crypto token is a process that makes it available on protocols other than the one it was originally designed for. This brings increased liquidity to the target ecosystem. In the case of wrapped bitcoin, each token represents one original bitcoin, which is stored in custody. When a trader wants to redeem the wrapped token for bitcoin, the wrapped version is “burnt,” or deleted from the chain, and the original is released.
Wrapped bitcoin tokens are stored in custody and can be redeemed for original bitcoin.
Coinbase’s Move into Wrapped Bitcoin
Coinbase’s announcement comes at a time when the wrapped bitcoin market is experiencing a significant shift. Earlier this month, BitGo, the company behind the popular wrapped bitcoin token wBTC, announced a joint venture with BiT Global, a Hong Kong-registered custody platform partially owned by the Tron ecosystem and Tron founder Justin Sun. This venture will continue to use the same BitGo multisignature technology and deep cold storage.
Coinbase is developing an alternative to BitGo’s wrapped bitcoin wBTC.
Building a Massive Bitcoin Economy on Base
According to Jesse Pollak, who runs Base, the team plans to build a “massive bitcoin economy” on the network. This ambitious goal is likely to be fueled by the introduction of cbBTC, which will provide users with a new way to access bitcoin on the Base blockchain.
The Base blockchain is designed to provide a scalable and secure platform for decentralized applications.
Conclusion
The introduction of cbBTC is a significant development in the world of cryptocurrency, and it will be interesting to see how this new initiative plays out. With the wrapped bitcoin market experiencing a significant shift, Coinbase’s move into this space could potentially disrupt the status quo and provide users with new opportunities for accessing bitcoin.
The future of bitcoin is looking bright.
