Teach you how to mint trust-free cross-chain bitcoin tBTC

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tBTC minimizes trust through mechanisms such as random beacons, and is currently a Bitcoin cross-chain solution with a high degree of decentralization.

Original title: “Introduction | How to Cast Trust-Free Bitcoin tBTC on Ethereum”
Written by: Carolyn Reckhow
Translation & Proofreading: Min Min & A Jian

Because BTC has many uses in the DeFi world, the demand for Bitcoin in the Ethereum ecosystem is also increasing. In view of the requirements of cryptographic finance for decentralization and trust-free, we need to find a way to safely hold Bitcoin on Ethereum without relying on a centralized third party.

tBTC is one of these methods. tBTC allows Bitcoin holders to safely access Ethereum applications: Bitcoin holders only need to exchange their Bitcoins into tBTC on tbtc.network, that is, an ERC20 token with a 1:1 endorsement of Bitcoin .

The most important thing is that tBTC can minimize trust: tBTC uses random beacons to select “signers”. The signers are responsible for holding bitcoin and need to provide 150% of the value of bitcoin as collateral. In other words, Bitcoin holders do not rely on BitGo, but a network of decentralized participants. In this network, every participant will be honest and trustworthy to safeguard the interests of Bitcoin holders.

At any time, tBTC and Bitcoin can be exchanged for each other without going through an intermediate party.

The whole process is very simple: Bitcoin holders only need to complete a few simple steps to mint tBTC and track their Bitcoins on tbtc.network.

Let’s learn how to mint tBTC. Then you can rest assured to use your Bitcoin to earn money!

Background knowledge of tBTC

The developers of tBTC have worked tirelessly to create an asset that meets the DeFi standards and spirit. tBTC is built on the Keep Network and uses advanced cryptography technology to allow users to safely and transparently use trust-free Bitcoin on Ethereum.

From a higher level, Keep Network mints tBTC through the following three simple steps.

  1. Receive Bitcoin on the Bitcoin blockchain
  2. Convene a group of decentralized “signatures” (see below) to store Bitcoin in a secure and trust-free way
  3. Once the Bitcoin transaction you send to the signer is confirmed by the Bitcoin blockchain, you will be able to get 1:1 tBTC anchored to Bitcoin on Ethereum.

Even better, as long as the same steps are used, the process can be reversed.

In summary, many important factors behind the design of tBTC make it uniquely attractive to DeFi.

E.g:

Security, transparency and open source

One of the main design goals of tBTC is to eliminate all the uncertainty of Bitcoin, which is very important for Bitcoin to enter decentralized finance. Not everyone believes that BitGO can safely store their bitcoins.

In other words, we want to ensure that tBTC is completely transparent and safe for all users. This is why tBTC is completely open source and adopts the highest cryptographic standards.

Note: tBTC and Keep Network use t-ECDSA elliptic curve algorithm. Binance currently also uses this algorithm. Zcash and Gnosis are building similar technologies.

Signer group

Another pain point that tBTC aims to solve is to eliminate opponent risk.

To this end, tBTC adopts the “signature group” system, which can process transactions without going through a centralized trusted intermediary.

A group of every three signers. Each transaction must be approved by the signatory group to be considered a successful verification. What’s important is that for every tBTC minted, the signatory will get a 20 basis point (2%) fee, which is an important mechanism to ensure network participation.

Equally important is that there needs to be a mechanism to ensure that the signer is honest and trustworthy and protect the interests of the mint.

To solve this problem, tBTC uses random beacons: a decentralized random selection tool that can select signers in a secure and decentralized manner at the cryptographic level. Random beacons cannot be manipulated.

The final step to ensure that the signers are honest and trustworthy (will not steal the bitcoins they keep) is that all signers must provide 150% of the value of the bitcoin deposit as a deposit. Once the signatories try to steal the bitcoins they hold, they will lose their security deposits and end up not worth the gain.

Now that we have solved this problem, let’s take a look at how to mint tBTC.

How to mint tBTC

Below is a step-by-step guide on how to use the tBTC application.

Before you start, please make sure you have some ether in your wallet, and then open the tBTC minting application.

1. Click “Deposit”.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

2. Connect your Ethereum wallet . We currently support Metamask, Ledger and Trezor hardware wallets.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

3. Choose your deposit amount . You can choose between 0.01 BTC and 10 BTC. After selecting, click “Create Address” .

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

4. Your wallet interface will pop up a transaction requesting your confirmation. Check the transaction and confirm it (this transaction will help you request a new group of signers). The transaction cost is approximately US$60 to US$100.

5. Similarly, check and receive the next transaction that pops up on your wallet interface. This time the transaction cost will be much smaller (this transaction will help you request a BTC address).

6. Once confirmed, you will see a Bitcoin address. Send the bitcoins that match the deposit amount you selected in the third step (taking 0.1 BTC as an example) to the bitcoin address.

Note: Never use an exchange wallet to send bitcoins.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

7. Send the bitcoins that match the number of coins you have selected to the generated bitcoin address. After the transaction is on the chain, you must wait for 6 Bitcoin blocks to be confirmed, which takes about 1 hour.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

Note: If you don’t always pay attention to the block confirmation, don’t forget to check the completion of your transaction on the block explorer.

8. Check and confirm the transaction that pops up on your wallet interface. The transaction will submit the SPV proof (proving that your Bitcoin transaction has been confirmed) to the Ethereum blockchain.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

9. Check and accept the next Ether transaction to complete the entire process and mint tBTC.

10. The casting process of tBTC has been completed. Your Ethereum wallet should have received tBTC.

Introduction | How to mint trust-free Bitcoin tBTC on Ethereum

Congratulations! You have successfully minted tBTC and can access the DeFi application on Ethereum. (On some wallet software) You may need to manually add the token (to see your tBTC balance)-here is the tBTC contract address.

Now, you can freely use tBTC on Ethereum. Although tBTC is still a new thing, it may be integrated into popular DeFi protocols such as Compound and Maker in the future.

We will soon be able to use trustless Bitcoin in trustless financial applications on Ethereum.

Source link: bankless.substack.com

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