We have talked about “chain-key Bitcoin” aka ckBTC in a previous forum thread which led to motion proposal Proposal: 50135 - IC Dashboard. The motion proposal was accepted and DFINITY has been busy building ckBTC. I am starting a new forum topic here to talk about the implementation of ckBTC.
What is ckBTC?
- Canister smart contracts on the IC can hold real bitcoin, on the bitcoin blockchain, by building on Threshold ECDSA Signatures and Direct Integration with Bitcoin. The strength of this approach is that one only needs to trust the ICP and the BTC networks for this integration, and no intermediate parties. However, as this is real bitcoin, one also has the downsides of bitcoin, meaning that transactions are relatively slow and expensive.
- ckBTC can be seen as wrapped bitcoin, but it is wrapped by a canister smart contract that builds on the direct bitcoin integration. That means that ckBTC is a token native to the Internet Computer, meaning it can be transferred quickly and with low fees, while being securely backed by real bitcoin on the Bitcoin blockchain. The planned fee for ckBTC transactions is 0.0000001 ckBTC, the equivalent of 10 satoshi.
- Users can use the “ckBTC minter” canister smart contract to deposit real bitcoin (on the bitcoin blockchain) to their personal deposit address, and receive an equal amount of ckBTC (minus fees). Similarly, users can use the ckBTC minter canister to return ckBTC tokens, and receive an equal amount of real bitcoin on a specified bitcoin address (again, minus fees).
- ckBTC follows the ICRC-1 token standard.
- ckBTC will be owned by the Network Nervous System (NNS), meaning upgrades to the canisters can only be done with approval of the NNS, there is no individual party controlling the canisters.
- ckBTC will be fully transparent: users will be able to see exactly how much bitcoin the ckBTC minter holds, as it will show all the bitcoin UTXOs that it holds. Similarly, one can see the supply of ckBTC tokens, and ensure that all ckBTC is always backed by BTC.
When will ckBTC be available?
We are planning to release ckBTC in early 2023.