0xBitcoin, the neutral PoW token in the Ethereum network

Few people know, but there is more than one way to create ERC-20 tokens. ERC-20 tokens can be created on the Ethereum network by pressing a few keys on the keyboard, but they can also be mined like Bitcoin (BTC). This became possible in 2018 when EIP-918 (Ethereum Improvement Proposal) was approved by the Ethereum Foundation.

With the approval of this proposal, tokens can now be created that have the best characteristics of Bitcoin with the speed, scalability and functionality of the Ethereum network. Mining solves many of the problems that plague Ethereum and ERC-20 tokens: unfair distribution, initial coin offerings (ICOs), pre-mines, airdrops, the list goes on. But when the token is distributed through proof-of-work mining, all of these problems go away. There is no single control center, no central development team and no single point of failure. Everything is controlled by a smart contract that runs independently on the Ethereum network.

But why do we need another Bitcoin clone, you ask?

0xBitcoin not only clones the technology and creates a new blockchain with a different name, like nameless bitcoin clones, it clones the implementation and principles of the original and merges them with Ethereum. Like Bitcoin, 0xBitcoin can serve as a store of value, but since this is the implementation of Bitcoin principles in the ERC-20 token format, it has all of the benefits that Ethereum tokens offer and can be used natively and trustworthily in the decentralized finance segment (DeFi) as a native, neutral and trustworthy currency. Using 0xBitcoin makes the entire Ethereum ecosystem more decentralized and secure.

What are the current risks in DeFi and how can 0xBitcoin solve them?

The problems that plague DeFi today are centralization and dependence on the actions of third parties. Let’s list some of them:

WBTC is widely used in many protocols. The private keys that govern the entire Wrapped Bitcoin (WBTC) smart contract are in the hands of a few people. If they are hacked, phished or otherwise attacked – which is not that rare – the hacker, having obtained these keys, can instantly create an unlimited amount of WBTC and steal all ethers (ETH) and tokens from all the liquidity basin . At the same time, the price of WBTC itself will plummet to almost 0, which will lead to another cascade of liquidations in the logs where it was used as collateral.

DAI, the “decentralized stable coin”, is not as decentralized as it seems. 51% of the assets that MakerDAO (DAI) back up and back up are Centralized Trusted Assets – USD Coin (USDC) and WBTC.

This is another real problem. Much of DeFi relies on DAI and is therefore indirectly at the mercy of the “central banks” who control these trustworthy assets: Coinbase (USDC) and BitGo (WBTC). Regulators have made it clear that they can and will turn off the oxygen for stablecoins, which is another vector of attack for the entire sector.

What would be the ideal trustworthy security for this job?

No central authority, team, or application should be behind such assets as they can and are known to fail.

Since the distribution of 0xBitcoin exists in the form of mining, no trusted third party is required. It is completely neutral and has no dependencies. It does not rely on central banks. In addition, 0xBitcoin inherits all of Ethereum’s security, making it as secure and resistant to 51% attacks as the network itself.

Regulatory risk. Government watchdogs can treat any token supported by a centralized team or stakeholder group as security, with all ensuing ramifications. In this regard, it is useful to have a neutral, trustworthy and fully decentralized currency within the network and rely on it, and the only ERC-20 that is 100% immune to regulatory risk is 0xBitcoin as it is fully decentralized and is immutable. Use in DeFi protocols reduces the overall risk and increases the reliability of these protocols.

What else is 0xBitocoin useful for the Ethereum ecosystem?

With Ethereum’s impending transition from proof-of-work to proof-of-stake, large numbers of miners will be forced to look outside of the Ethereum ecosystem to keep their rigs going. Many would like to continue supporting and developing the Ethereum ecosystem, not competing platforms. Mining 0xBitcoin, a neutral store of value from Ethereum, seems like a good choice.

Final thoughts

If the future of decentralized funding belongs to the Ethereum ecosystem, then 0xBitcoin has a great future. Having all the attributes of the original bitcoin and all the functionality of ERC-20 tokens increases the reliability and decentralization of the entire environment. 0xBitcoin combines the best of both worlds: the trustlessness, decentralization, immutability and neutrality of Bitcoin and the functionality of the Ethereum network.

We’re at the very beginning of the journey, visit the 0xbtc website or join the community on Twitter or Discord to learn more and build the project together.

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