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Ask HN: Could Bitcoin be replaced by an ERC-20 token?

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Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#1

Post by TekMol »

One of the main arguments against Bitcoin is its energy consumption.

On the other hand, it is often said that there will be no new blockchain that achieves what Bitcoin has achieved: Being distributed without a premine that makes the founders rich and with no way for the people in power to inflate the supply.

What would happen is an ERC-20 token would be created that is distributed just as Bitcoin. In a way that everyone who holds Bitcoin automatically owns the same amount of this token? A fork of Bitcoin on the Ethereum blockchain, so to say.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#2

Post by latchkey »

Yes. I've been saying for years that the largest threat to bitcoin is tokenized bitcoin.

The centralized version is called WBTC [1] and there are several less centralized versions as well, such as renBTC [2].

Once you've wrapped your bitcoin, it opens up a lot more possibilities, such as using it as collateral for loans or providing it as liquidity in DeFi. It brings actual usability to bitcoin beyond just as a store of value (hodl) or payment mechanism. Projects like Badger Finance [3] have been working for over a year now on this area.

[1] https://wbtc.network/

[2] https://renproject.io/

[3] https://badger.finance/

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#3

Post by TekMol »

latchkey wrote: post #2

Yes. I've been saying for years that the largest threat to bitcoin is tokenized bitcoin. The centralized version is called WBTC [1] and there are several less centralized versions as well, such as renBTC [2]. Once you've wrapped your bitcoin, it opens up a lot more possibilities, such as using it as collateral for loans or providing it as liquidity in DeFi. It brings actual usability to bitcoin beyond just as a store…

Could it be that these 3 approaches still rely on the existence of Bitcoin?

I don't think "tokenized Bitcoin" would replace it. As Bitcoin would still be the basis for the tokens.

Similar to how "tokenized Tesla shares" would not replace Tesla. Tesla would still be needed for those tokens to have value.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#4

Post by wmf »

Bitcoin maxis believe that Ethereum won't be stable and secure in the long term so everything running on Ethereum inherits that concern. People would also worry that the Ethereum community could modify the token in some way due to the precedent of The DAO hack.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#5

Post by latchkey »

TekMol wrote: post #3
latchkey wrote: post #2

Yes. I've been saying for years that the largest threat to bitcoin is tokenized bitcoin. The centralized version is called WBTC [1] and there are several less centralized versions as well, such as renBTC [2]. Once you've wrapped your bitcoin, it opens up a lot more possibilities, such as using it as collateral for loans or providing it as liquidity in DeFi. It brings actual usability to bitcoin beyond just as a store…

Could it be that these 3 approaches still rely on the existence of Bitcoin? I don't think "tokenized Bitcoin" would replace it. As Bitcoin would still be the basis for the tokens. Similar to how "tokenized Tesla shares" would not replace Tesla. Tesla would still be needed for those tokens to have value.

I'm not talking about replacing bitcoin. Bitcoin, the network, needs to stay around. There needs to be one asic controlled network.

The usage model does not. This is likely part of why the lightning network struggles so much for adoption. It doesn't add the same amount of value as tokenized bitcoin. I can borrow any coin against my tokenized bitcoin (which can often result in a positive apy), then move that coin to any other L2 (ie: low cost transaction network) and use that to do transactions.

Imagine a day where instead of racking up debt on your credit cards each month and paying it off. You simply borrow against your existing holdings and pay that debt back while earning interest on your holdings. This model makes that 1-5% cashback on credit cards look like a joke.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#6

Post by rvz »

> Could Bitcoin be replaced by an ERC-20 token?

No. Here's why.

Ethereum is already a pre-mined, VC fuelled project that is compromised by the fact that it was able to reverse its the hack due to the DAO hack situation to cater to these investors who lost money. If another giant hack like that was to happen again, it seems that the founders can do just that again; something the Bitcoin maxis would reject and detest.

I guess this question is best answered by them, especially by randomhodler84. I would say Bitcoin does not need to be replaced as a ERC-20 token and I'd just leave it alone to them.

Tokenising Bitcoin won't achieve anything.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#7

Post by TekMol »

latchkey wrote: post #5
TekMol wrote: post #3

Earlier quoted context omitted.

Could it be that these 3 approaches still rely on the existence of Bitcoin? I don't think "tokenized Bitcoin" would replace it. As Bitcoin would still be the basis for the tokens. Similar to how "tokenized Tesla shares" would not replace Tesla. Tesla would still be needed for those tokens to have value.

I'm not talking about replacing bitcoin. Bitcoin, the network, needs to stay around. There needs to be one asic controlled network. The usage model does not. This is likely part of why the lightning network struggles so much for adoption. It doesn't add the same amount of value as tokenized bitcoin. I can borrow any coin against my tokenized bitcoin (which can often result in a positive apy), then move that coin to a…

Then how is that a "threat to bitcoin"?

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#8

Post by latchkey »

TekMol wrote: post #7
latchkey wrote: post #5

Earlier quoted context omitted.

I'm not talking about replacing bitcoin. Bitcoin, the network, needs to stay around. There needs to be one asic controlled network. The usage model does not. This is likely part of why the lightning network struggles so much for adoption. It doesn't add the same amount of value as tokenized bitcoin. I can borrow any coin against my tokenized bitcoin (which can often result in a positive apy), then move that coin to a…

Then how is that a "threat to bitcoin"?

Bitcoin maxi's get their panties in a twist as people stop using their network and all the bitcoin gets wrapped up into these bridges. The real value gets developed elsewhere.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#9

Post by dimensionc132 »

It's taken more than 10 years for Bitcoin to be as distributed as it is now in regards to mining and halving using POW.

But in regards to your question, someone has already made a POS Bitcoin coin called Bitcoin Green in 2017.

Whitepaper is link is available here https://www.coingecko.com/en/coins/bitcoin-green

"Bitcoin Green (BITG) is a sustainable cryptocurrency modeled after Satoshi Nakamoto’s vision for Bitcoin. It is a decentralized, peer-to-peer transactional currency designed to offer a solution to the problematic exponential increase in energy consumed by Bitcoin and other proof-of-work currencies. Proof-of-work mining is environmentally unsustainable due to the electricity used by high-powered mining hardware. Bitcoin Green utilizes an energy efficient proof-of-stake algorithm, can be mined on any computer, and will never require specialized mining equipment. The Green Protocol offers a simple solution to Bitcoin sustainability issues and provides a faster, more scalable blockchain that is better suited for daily transactional use."

What happened to Bitcoin Green? It is dead. Why? Because people don't want a Bitcoin POS. Maybe someone owning 16% of the supply had something to do with it.

https://web.archive.org/web/20190809182919/https://bitg.org/

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#10

Post by latchkey »

wmf wrote: post #4

Bitcoin maxis believe that Ethereum won't be stable and secure in the long term so everything running on Ethereum inherits that concern. People would also worry that the Ethereum community could modify the token in some way due to the precedent of The DAO hack.

It isn't about modifying the token, it is about rolling back transactions with hard forks. This could be done on any blockchain. The social consensus of the bitcoin miners is the only thing that prevents this from happening.
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