So this assumes there is pent-up demand to use BTC as part of smart contracts that is not yet met by WBTC on Ethereum. I don't see anything that would validate that assumption.
Especially since everything else is on Ethereum anyway. Since this is just a layer 2 solution, you might as well treat Ethereum as a layer 2 for Bitcoin.
99% of Bitcoin remains passively outside of smart contracts. Only about 5B on Ethereum. This can be a fairly large market and we're in early days. More use cases don't need to take anything away from Ethereum!
In the following order of nuance, the 99% of Bitcoiners:
Don’t know about this
Don’t like the idea of any other distributed ledger attracting capital away from Bitcoin purchases
Don’t know the Ethereum platform is different than any other “altcoin”
Don’t like Ethereum based on valid or fictional criticism
Don’t like WBTC
Don’t like renBTC in its current state
Know about all of this, don't mind it, are not interested in complex transactions, are not interested in turning their bitcoin into an interest bearing asset
The growth to the 1% has been pretty good and fast! Billions of $ of BTC on this stuff over just the last two quarters. Isn’t that how every startup pitch starts? “If we just get 1% of this market ....”
WBTC is essentially custodial. A couple partners hold some multisig keys on all Bitcoin that is deposited to be minted on Ethereum as WBTC. It is mainly BitGo, Kyber Network and Republic Protocol (Ren, the same people behind renBTC). WBTC requires KYC with BitGo to mint and redeem. Centralized, custodial, a few distributed key holders. Feature complete, so its not changing. Institutions like that actually, so it is pretty popular.
renBTC is by Republic Protocol, through their main product RenVM. RenVM allows holders of the REN token to stake 100,000 REN to create a "Darknode", which process all the minting, burning and storage of assets that go between chains. renBTC is Bitcoin to erc20 Ethereum. There are various other assets the Darknode holders process and earn. The amount Darknode holders earn in dollars has been increasing around 20% per month. The issues with RenVM and renBTC is that is actually hasn't reached that state. The darknodes do earn, but the current state does not use the darknodes for the decentralized storage of assets, instead, the Ren team has 12 keys stored around the world and requires collusion between the people on the Ren team to compromise. Now, some people call this is criticism, but this is still better than exchange cold storage which people already trust with billions of dollars of assets. For example, Gemini Exchange (Winklevoss Twins) brag about how their cold storage is 3 keys stored around the globe. lol, only three. People's concern is that while in this current state, the Ren protocol's geographically distributed team can be compromised by a government. Doubtful because nobody in one country has all the keys, and they are quickly speeding towards upgrading away to putting all processing on the darknodes. Anyway, for earning fees as a darknode its current state is quite unique, for users it is a stopgap solution (and not unique enough for BTC on Ethereum) as their bridge simply has more assets and doesn't require KYC or impose any limitations. Both the current and future iteration is using MPC cryptography for security. And again, their team is part of the mastermind behind WBTC. Darknode holders evangelize renAssets and get them into various other DeFi projects, which causes more people to want to mint and burn RenAssets, mostly renBTC so they can earn interest on their bitcoin. As you can see by this thread, many times renBTC is not mentioned at all. But it is the second largest Bitcoin on Ethereum. RenVM is not limited to minting assets onto Ethereum, they have or will be rolling out bridges to other chains as well, to Darknode holders delight.
there are competitors to renBTC such as tBTC, which aims to chisel at just the trustless BTC hegemony and not much else. Its growing decently.
Native smart contracts would be cool, but Stacks is not native smart contracts. It's a separate blockchain that integrates with the Bitcoin blockchain.
In other words, you are trusting the Stacks blockchain to custody your bitcoins, just like with TBTC or RENBTC or any of the other decentralized Bitcoin bridges.
From their site:
> Like Bitcoin, Stacks is a layer-1 blockchain. Proof of Transfer connects it to Bitcoin with a 1:1 block ratio.
What about the fact that the core ethereum team revealed that they’d reverse a smartcontract with a hard fork when members of the core team make an expensive mistake in one while bitcoin has no such culture?
This is canon and dates to the original DAO. A quick google on DAO crisis should give you a bunch of reading material.
Compare that to the time Binance lost $500M in BTC and contemplated doing a chain revert because it would be way cheaper than $500M but didn't because it would break the illusion that BTC tx are irreversible.
BTC tx are reversible, it's just going to become prohibitively expensive for almost anyone to do soon.
That is rather misleading to use as an example... It's widely regarded as a one time thing that was agreed upon partly because the system (and testing tools) were so new at the time.
Bitcoin had a bug that was required an organized chain reorg back when it was early as well, but it's not regarded as fatal to putting trust in the chain now (search for "bitcoin value overflow bug", was kinda interesting)
More recently, Parity, one of the main developers of one the Ethereum clients, had millions locked up due to mistake in their smart contract code. They complained loudly, tried to get another roll back, and finally gave up... The overwhelming concensus was that Ethereum is no longer alpha grade, there will be no take backs ever again.
To be clear, I wasn't asserting that Eth was less valuable as a result of the DAO reorg (quite the contrary actually). I was merely pointing out that a reorg occurred.
Thank you for the education on the bitcoin reorg, I didn't actually know that and agree that it's orthogonal to the trust narrative now.
My broad point was that the trust is not in the code, it's in the community and their policies.
> the trust is not in the code, it's in the community and their policies
I can heartily agree with that.
That's why I think having the "layer 0" social consensus of a network aim for maximum clarity, so participants have as few points where there's three potential for surprise disagreement later.
Ethereum is very strongly "no abnormal state changes" starting with the Parity issue. I think there have been a few more similar cases of contract bugs, some even involving client devs, and any suggestion of a new fork has met with strong opposition from all ends of the community.
Another thing I think is useful for a blockchain is to have multiple independent clients... It helps prevent devs from having outsize voice in discussion (though the users and the node runners are always the final vote).
I think working out the meta structure of how to work these social level contracts is definitely something the whole cryptocurrency industry needs to work on.