How to Mint Trustless tBTC on Ethereum

Original title: "Introduction | How to mint trustless Bitcoin tBTC on Ethereum"

Original source: Ethereum Enthusiast

Because BTC has many uses in the DeFi world, the demand for Bitcoin in the Ethereum ecosystem is also growing. Given the decentralized and trustless requirements of crypto-finance, we need to find ways to securely hold Bitcoin on Ethereum without relying on a centralized third party.

tBTC is one such method. tBTC allows Bitcoin holders to securely access Ethereum applications: Bitcoin holders simply exchange their Bitcoins for tBTC, an ERC20 token backed 1:1 by Bitcoin, on tbtc.network .

Most importantly, tBTC can achieve trust minimization: tBTC uses random beacons to select "signers" , the signer is responsible for holding the bitcoin and needs to provide 150% of the bitcoin value in ether as collateral. That is, instead of BitGo, Bitcoin holders rely on a decentralized network of 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 between each other without going through an intermediary.

The whole process is very simple: Bitcoin holders only need to complete a few simple steps to be in tbtc Mint tBTC and track its bitcoins on .network.

Let's learn how to mint tBTC. Then you can safely use your bitcoins to earn income!

BTC background knowledge

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

At a high level, Keep Network mints tBTC through the following three simple steps.

1 Receive bitcoins on the Bitcoin blockchain

2 Assemble a decentralized group of "signers "(see below) store bitcoin in a secure and trustless way

3Once the bitcoin transaction you send to the signer is confirmed by the bitcoin blockchain, you can Get tBTC that is 1:1 anchored to Bitcoin.

Even better, the process can be reversed just by using the same steps.

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

For example:

Security, transparency and open source

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

That said, we want to make sure that tBTC is completely transparent and secure for all users. This is why tBTC is completely open source and adopts the highest cryptography standards.

Click here to view the code of tBTC and Keep Network at any time.

(Note: tBTC and Keep Network use  t-ECDSA  elliptic curve algorithm. Binance also currently uses The algorithm. Zcash and Gnosis are building similar technology.)

Signer Group

tBTC aims to solve is removing counterparty risk.

To this end, tBTC adopts the "signer group" system without going through a centralized trusted intermediary Process transactions.

In groups of three signatories. Each transaction must be approved by the group of signers to be considered successful. Importantly, signers receive a fee of 20 basis points (2%) for every tBTC minted, which is an important mechanism to ensure network participation.

Equally important, there needs to be a mechanism to ensure that the signer is honest and trustworthy and protects the minter's interests.

To solve this problem, tBTC uses a random beacon: a decentralized random selection tool, Signers can be selected in a cryptographically secure and decentralized manner. Random beacons cannot be manipulated.

The final step in ensuring that the signers are honest (and not stealing the bitcoins in their custody) is that all signers Ether equivalent to 150% of the Bitcoin deposit value must be provided as a security deposit. Once the signers try to steal the bitcoins in their custody, they will lose the security deposit and end up with more losses than gains.

Now that we’ve got that out of the way, let’s see how to mint tBTC.

How to mint tBTC

Here is a step-by-step guide on how to use the tBTC app.

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

1.  Click "Deposit".

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

3. Choose your deposit amount. You can choose between 0.01 BTC and 10 BTC. Once selected, click Create Address.

4. A transaction will pop up on your wallet interface asking you to confirm. Confirm after checking the transaction (this transaction will help you request a new set of signers). Transaction costs are approximately $60-$100.

5. Similarly, check and receive the next transaction that pops up on your wallet interface, this transaction The 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 bitcoin (take 0.1 BTC as an example) that matches the deposit amount you selected in the third step to the bitcoin address.

Note: Never use an exchange wallet to send bitcoins.

7. Send the bitcoins that match the deposit amount you selected to the generated Bitcoin address. After the transaction is on-chain, you have to wait for 6 Bitcoin blocks to be confirmed, which takes about 1 hour.

Note: If you don’t pay attention to the block confirmation all the time, don’t forget the last Go to the block explorer to check the completion of your transaction.

8. Check and confirm the transaction that pops up on your wallet interface. This transaction commits the SPV proof (proof that your Bitcoin transaction was confirmed) onto the Ethereum blockchain.

9. Check and accept the next ether transaction to complete the whole process And mint tBTC.

10. The minting process of tBTC has been completed. You should have received tBTC in your Ethereum wallet.

Congratulations! You have successfully minted tBTC and can access DeFi applications 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 .

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