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Buy Wrapped Bitcoin in the UK
Wrapped Bitcoin
WBTC
What is Wrapped Bitcoin?
How to buy Wrapped Bitcoin (wBTC): Why do investors buy Wrapped BTC? Here we explain the process in user-friendly language. Wrapped Bitcoin, often abbreviated as wBTC, is a fascinating concept that combines the advantages of both worlds: Bitcoin (BTC) and Ethereum (ETH).
What Is Wrapped Bitcoin?
You’ve probably heard of Bitcoin (BTC) – the pioneer cryptocurrency that started it all. It’s decentralised, has a level of protection, and widely recognised as digital gold. However, Bitcoin primarily operates on its own blockchain, which limits its compatibility with other platforms.
Ethereum (ETH), on the other hand, is a versatile blockchain that supports smart contracts, decentralised applications (dApps), and various tokens. It’s like a bustling city where developers can build all sorts of innovative projects.
Now, imagine if we could bring Bitcoin’s value and liquidity to the Ethereum ecosystem. That’s where Wrapped Bitcoin comes in!
How does wrapped BTC (wBTC) work?
Wrapped Bitcoin is essentially tokenised Bitcoin created on the Ethereum blockchain using the ERC-20 standard. Here’s how it works:
Tokenisation
When someone wants to convert their BTC into wBTC, they deposit their Bitcoin with a custodian (a trusted entity). The custodian then mints an equivalent amount of wBTC tokens on Ethereum. Each wBTC token represents a specific amount of Bitcoin (usually 1:1).
Backed by real BTC
The beauty of wBTC lies in its backing. For every wBTC token in circulation, there’s an actual BTC held in reserve. So, if you hold 1 wBTC, it’s backed by 1 BTC locked away somewhere.
Wrapping and unwrapping
CoinJar removes the standard complexities in the process by allowing you to buy wBTC directly without going through the complex “wrapping” process.
While CoinJar doesn’t provide an “unwrapping” service, you can always convert your wBTC back to regular BTC using the CoinJar app when needed.
You can check the live Wrapped Bitcoin price at the top of this page.
Use cases for wBTC
DeFi (Decentralised Finance)
wBTC enables Bitcoin holders to participate in DeFi protocols. You can lend, borrow, or trade wBTC just like any other Ethereum token.
Liquidity pools
wBTC adds liquidity to decentralised exchanges (DEXs) like Uniswap. Traders can swap wBTC for other tokens seamlessly.
Collateral
Some lending platforms accept wBTC as collateral for borrowing stablecoins or other assets.
Cross-chain interoperability
wBTC acts as a bridge between Bitcoin and Ethereum. You can move your BTC to Ethereum, use it in DeFi, and then convert it back to BTC when needed.
Why do investors buy wBTC?
Access to DeFi
If you’re a Bitcoin holder who wants to explore DeFi opportunities, wBTC allows you to do so without selling your BTC. You can earn interest, trade, and participate in yield farming. Diversification: By holding wBTC, you diversify your crypto portfolio.
Instead of being limited to Bitcoin’s ecosystem, you gain exposure to Ethereum’s vibrant DeFi space.
Liquidity provision
Providing liquidity to DEXs by staking wBTC can earn you trading fees and rewards.
Wrapped BTC: Conclusion
Wrapped Bitcoin bridges the gap between Bitcoin and Ethereum, unlocking new possibilities for both communities. It’s like having a portal that connects two worlds – the solidity of Bitcoin and the dynamism of Ethereum.
Remember, each wBTC token represents real Bitcoin, making it a powerful tool for cross-chain interactions. Keep an eye on its price, as it fluctuates based on market demand and adoption.
How to buy Wrapped Bitcoin on Coinjar
If you’re interested in buying Wrapped Bitcoin (wBTC) on CoinJar, here’s a step-by-step guide to get you started.
Sign Up for CoinJar: Download the CoinJar app on your iOS or Android device. Create an account and verify your ID. This process usually takes just a few minutes.
Deposit Funds: Transfer funds from your bank account. CoinJar also supports instant purchases using Visa or Mastercard debit cards. How to buy wBTC: Once your account is funded, search for “Wrapped Bitcoin” (wBTC) and select it. Choose your desired amount and execute the purchase. Enjoy Your wBTC: Congratulations! You now own wBTC, which represents Bitcoin on the Ethereum network.
Cash, credit or crypto?
Buy Wrapped Bitcoin using Visa or Mastercard. Get cash in your account with Faster Payments Service (FPS). Convert crypto-to-crypto with a single click.How to buy Wrapped Bitcoin with CoinJar
Start your cryptocurrency portfolio with CoinJar by following these steps.
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Frequently asked questions
What is Wrapped Bitcoin (wBTC)?
Wrapped Bitcoin (wBTC) is a digital asset that bridges the gap between the Bitcoin (BTC) blockchain and the Ethereum ecosystem. It allows users to interact with Bitcoin on the Ethereum network by creating an ERC-20 token representation of BTC.
How is wBTC created?
When someone wants to convert their BTC into wBTC, they deposit their Bitcoin with a custodian. The custodian then mints an equivalent amount of wBTC tokens on the Ethereum blockchain.
These tokens are backed by real BTC held in reserve.
By buying WBTC on an exchange like CoinJar, you’re bypassing the costly and complex “wrapping” process. While CoinJar can’t “unwrap” your WBTC for you, you’ll be able to convert it to regular BTC using the CoinJar app.
The Bitcoin underpinning this process is maintained by the WBTC DAO (decentralised autonomous organisation), a group of more than 30 companies and blockchains that includes some of the biggest players in the cryptocurrency space.
What role does the Ethereum blockchain play in wBTC?
The Ethereum blockchain serves as the foundation for wBTC. It hosts the smart contracts that facilitate the creation, management, and transfer of wBTC tokens. By leveraging Ethereum’s capabilities, wBTC becomes part of the broader decentralised finance (DeFi) ecosystem.
How does wBTC support decentralised finance (DeFi) applications?
Liquidity Provision: wBTC adds liquidity to decentralised exchanges (DEXs) like Uniswap. Traders can seamlessly swap wBTC for other tokens.
Collateral: Some lending platforms accept wBTC as collateral for borrowing stablecoins or other assets.
Cross-Chain Interoperability: wBTC acts as a bridge between Bitcoin and Ethereum, enabling users to participate in DeFi protocols without selling their BTC.
What is the circulating supply of wBTC?
The circulating supply of wBTC refers to the total number of wBTC tokens currently in circulation. Each token represents a specific amount of Bitcoin.
Is wBTC governed by any organisation?
Yes, wBTC has a decentralised autonomous organisation (DAO) called the wBTC DAO. The DAO oversees the protocol’s development, upgrades, and governance decisions. It ensures that wBTC remains protected and aligned with the community’s interests.
Why should someone buy wBTC?
Access to DeFi: If you’re a Bitcoin holder, wBTC allows you to explore DeFi opportunities without leaving the Bitcoin ecosystem.
Diversification: Holding wBTC diversifies your crypto portfolio by connecting it to Ethereum’s dynamic DeFi space.
Participate in DeFi: You can lend, borrow, trade, and earn interest using wBTC within DeFi applications.
Where can I buy Wrapped Bitcoin?
You can buy it here on CoinJar, already wrapped. Or, you can buy wBTC on various decentralised exchanges (DEXs) that support it.
Look for wBTC trading pairs on platforms like Uniswap, Sushiswap, or Curve Finance. Many decentralised exchanges actively support Wrapped Bitcoin (wBTC) trading pairs.
wBTC combines the reputation of Bitcoin with the flexibility of Ethereum – a powerful combination for crypto enthusiasts.
Is wBTC is an erc-20 token?
Yes, Wrapped Bitcoin (wBTC) is indeed an ERC-20 token. It exists on the Ethereum blockchain, allowing users to interact with Bitcoin (BTC) within the Ethereum ecosystem.
By tokenising BTC, wBTC enables seamless cross-chain interactions and opens up exciting possibilities in the world of decentralised finance (DeFi).
What is minted wBTC?
Minted wBTC refers to the process of creating new Wrapped Bitcoin (wBTC) tokens.
Who created wBTC?
Wrapped Bitcoin (wBTC) is an ERC-20 token backed by Bitcoin (BTC) on a 1:1 basis. It was jointly launched by Bitgo, Kyber network and Ren in January 2019, making Bitcoin compatible on the Ethereum network.
Through wBTC, Bitcoin holders can participate in activities such as lending, borrowing, margin trading, and yield farming on decentralized finance (DeFi) applications. The Wrapped Bitcoin protocol is maintained by a decentralized autonomous organisation (DAO), which consists of stakeholders within the DeFi space.
In summary, wBTC acts as a bridge between Bitcoin and Ethereum, allowing Bitcoin users to access DeFi applications and use it on decentralised exchanges while contributing to additional liquidity in the DeFi ecosystem.
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Cryptoassets traded on CoinJar UK Limited are largely unregulated in the UK, and you are unable to access the Financial Service Compensation Scheme or the Financial Ombudsman Service. We use third party banking, safekeeping and payment providers, and the failure of any of these providers could also lead to a loss of your assets. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. Capital Gains Tax may be payable on profits. CoinJar’s digital currency exchange services are operated in the UK by CoinJar UK Limited (company number 8905988), registered by the Financial Conduct Authority as a Cryptoasset Exchange Provider and Custodian Wallet Provider in the United Kingdom under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended (Firm Reference No. 928767).
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