The Dfinity Foundation has issued ckBTC, a liquid and cost-efficient "twin" token that is backed on a 1:1 basis with bitcoin (BTC), bringing layer-2 capabilities to bitcoin. By integrating directly with the Bitcoin network, ckBTC can be used on decentralized finance applications on supported networks without relying on centralized bridging services, which are a security concern in the broader crypto ecosystem. Unlike wrapped tokens, ckBTC uses canisters and does not require intermediaries or risky cross-chain bridges. However, while bitcoin integration unlocks opportunities, it also inherits the slow and expensive transaction times associated with the Bitcoin network.
(By Shaurya Malwa)
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