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Wrapped bitcoin

A token that says bitcoin, on another chain, is a claim on a custodian. The custodian can pause it.

A worked case

Someone buys a bitcoin token on another chain and calls it bitcoin. The wrapper pauses. The token does not move. The bitcoin, if it is still locked, is not in their wallet. The name was the costume.

The lock

Bitcoin is held by a custodian, or by a set of merchants. A token is issued elsewhere. You hold the token. They hold the coin.

The pause

The wrapper's contract can have a freeze, a mint authority, and an upgrade. None of those exist on the bitcoin you thought you bought. They exist on the claim.

Bitcoin, held by someone else

Wrapped Bitcoin is a token on Ethereum that represents bitcoin held by a custodian, with merchants involved in minting and burning. You can move the token with an Ethereum wallet. You cannot move the locked bitcoin with that wallet. The custodian's policy, including a pause, sits between the two.

Calling the token bitcoin is a convenience. The check is the custodian.

Read it yourself

• Wrapped Bitcoin

These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.

Apply the check

Open a question. The line is about this topic. It is not a verdict that anything is safe.

Check yourself

Write it in your own words. The course's answer opens after that. Nothing is sent.