tBTC

tBTC is a bitcoin-backed token on Ethereum created by the Threshold Network, designed to let bitcoin be used in decentralized finance without trusting a single custodian. Each tBTC is redeemable one-to-one for bitcoin held by rotating groups of node operators using threshold cryptography, in which a large majority of a signer set must cooperate to move the underlying funds.

How it works

Minting begins when a user sends bitcoin to a wallet controlled by a distributed signer group; the protocol then issues tBTC on Ethereum, and redemption reverses the flow. The first version launched in 2020 with heavy collateral requirements that limited scale, and the redesigned v2, live since 2023, secures deposits with large randomly selected signer sets under threshold ECDSA, so no small clique can steal deposits. The system's trust model sits between a pure custodian and pure cryptography: users rely on economic incentives and the improbability of mass signer collusion rather than on a single company's honesty.

In the gold vs bitcoin debate

Wrapped bitcoin is the industry rebuilding gold certificates in digital form: the asset sits in a vault, physical or cryptographic, while a circulating claim does the work. The dominant wrapped product, WBTC, relies on a designated custodian, exactly the model that let paper gold claims multiply against vaulted metal. tBTC is the experiment in whether a bearer asset can be represented elsewhere without that concentration, and its progress is a live test of how far trust can be engineered away from the claim model.