How does WBTC on Ethereum work?

Question

I'm trying to wrap my head around how WBTC works on the Ethereum blockchain.

My understanding at the moment is that when BTC is sent to a particular BTC address, then a WBTC is generated on the Ethereum Blockchain and given to a specific Ethereum Address. If that WBTC is sent back to the Ethereum Start Contract to be exchanged for an original BTC, then that WBTC is burnt, and the original BTC is taken out in the BTC blockchain.

If all the above is true, then my Question is:

• Who is the middle man between the BTC blockchain and the Ethereum blockchain? Is there a third Blockchain (as I have heard some exist) that control the BTC addresses and Ethereum addresses to make this possible, or how does it work?

Answer 1

The organization that controls the issuance of WBTC is mainly BitGo, the issuance of WBTC happens when an amount of bitcoin is sent to a "wallet" that the company has access to, and after that, they mint the same amount in WBTC(ERC20).

In the case of this bitcoin tokenization the organization that ensures WBTC 1:1 BTC is centralized, but there are other alternatives.

Take a look here: https://www.youtube.com/watch?v=iExly7FGKAQ

Answer 2

Wrapped bitcoin is an ethereum ERC20 token that is pegged to Bitcoin. Pegging means that, for every WBTC token you available, there is a corresponding one Bitcoin that set aside to represent it. In that if you give the issuer of WBTC 1 bitcoin, they will give you one WBTC and vice versa. in simple terms, it creates an open exchange that allows ethereum users to hold tokens pegged to BTC. The minting of new WBTC has to ensure that the reserve of bitcoin to the supply of WBTC is to a ratio of 1:1 you can go through their white paper to see how it all works. the whitepaper that describes how wbtc works