On April 3, 2023, the Dfinity Foundation, a development team behind the Internet Computer (ICP) network, announced the launch of a native ICP token called “Keychain Bitcoin” or “ckBTC.” The bitcoin derivative is backed 1:1 with the leading cryptocurrency asset. On Monday, Dfinity detailed that the technology “relies on protocol-level integration with the Bitcoin network.”
Breaking Through Custodians and Bridges: The Benefits of Chain-Key Bitcoin’s Smart Contract-Based System
On Twitter, the Dfinity Foundation Announced the full release of keychain bitcoin, also known as ckBTC. “Proposals 115468, 115470 and 115473 have been adopted with great success,” the team explained. “Thank you very much to all the people (ICP) who manually voted to make this happen.” according to a blog postckBTC is backed 1:1 with bitcoin (BTC), and the system operates with “centralized custodians, no bridges, and no traditional cloud providers.”
The ICP-based bitcoin derivative is considered a “significant advance in blockchain interoperability” and the technology is integrated with Bitcoin at the protocol level, according to the Dfinity blog post. The ckBTC system uses vaults called receptacles, which are powered by a smart contract instead of relying on a custodian or bridge. Essentially, to get ckBTC, a person needs to deposit BTC in exchange for the ICP token, and withdrawals work the same way when ckBTC is exchanged for real bitcoin.
“Any container can send Bitcoin transactions to the Bitcoin network through ICP nodes, thanks to direct integration at the protocol level.” definition Explain. The company insists that the technology has significant potential and can add new use cases.
“(Native cross-chain technology) has the potential to enable new cross-chain capabilities and unleash a plethora of 100% on-chain services, such as multi-token transactions or multi-token wallet systems, which would greatly expedite the crypto user. experience,” notes the Dfinity blog post.
The announcement further details that several ICP-based decentralized applications (dapps), including Openchat, Iclighthouse, Plethora Game, and Distrikt App, already support ckBTC. While many blockchains have bitcoin-derived tokens, most rely on bridges or custodians. For example, the largest bitcoin derivative, WBTC, leverages custodian Bitgo for minting and redemption purposes.
What potential do you see in the native cross-chain technology behind ckBTC and how do you think it will affect the future of blockchain interoperability? Share your thoughts on this topic in the comments section below.
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