Threshold: Bridge BTC to Ethereum
By Rayna Ishihara | Crescent City Capital Market Analyst Intern
What is Threshold:
Threshold uses threshold cryptography to enable secure and private transactions for digital assets without relying on a centralized authority. This addresses concerns about data privacy and user control in blockchain technology, cryptocurrency, and DeFi. By eliminating the need for central authorities, users can maintain control over their data and transactions, avoiding the privacy and usability tradeoff that often occurs when using digital services.
Ethereum’s token, ETH, has been utilized for smart contracts and decentralized applications, but BTC until now has only been used for investment. Threshold’s tBTC is a decentralized bridge that allows Bitcoin (BTC) to be used on the Ethereum network. While Wrapped Bitcoin (WBTC) enables BTC to be used on Ethereum, it requires a third-party custodian to convert BTC to WBTC, which poses security concerns. Threshold’s fully decentralized BTC-ETH Bridge eliminates this issue and allows for secure and direct use of BTC on the Ethereum network.
Threshold Network is a product resulting from the merger of two decentralized protocols, NuCypher and Keep Network, launched in January 2022. Threshold takes structural elements from Keep Network and privacy elements from NuCypher, and allows for smart contract access and management of encrypted data in a decentralized framework. The network aims to provide sustainable, blockchain-based privacy solutions for users.
Threshold Tech:
Threshold’s services include proxy re-encryption service (PRE) and the tBTC bridge protocol.
Threshold Network provides a unique solution for user privacy concerns in web3 through its proxy re-encryption service (PRE). The PRE protocol allows users to control access to sensitive data on public networks without exposing the underlying data to any external party or validator. The nodes on the Threshold Network use threshold cryptography to securely and cooperatively re-encrypt data for recipients based on access conditions defined by the data owner. This service is applicable to use cases that aim to maintain data ownership while allowing data sharing, such as paid subscriptions to encrypted content or the transfer of data ownership for encrypted NFTs. The data remains private and encrypted, and data owners maintain the ability to share that data and enforce access controls.
Current Bitcoin to Ethereum bridges require users to trust a third party intermediary, which goes against the idea of secure, permissionless decentralization. Threshold’s tBTC bridge protocol is a decentralized bridge that provides Bitcoin holders with permissionless access to DeFi and the expanding web3 universe. It replaces centralized intermediaries with a group of independent operators running nodes on the Threshold Network, secured through threshold cryptography. The selection of operators rotates weekly to protect against any individual or group seizing control, and user funds are controlled by math rather than hardware or people. Threshold’s tBTC bridge protocol is permissionless, making it open and accessible to all.
Threshold Token:
The Threshold Token (T) is the upgraded native token of the Threshold Network that serves as both a utility and governance token. T tokens are used for running the network and can also be used to earn staking rewards and liquidity pools. To help verify activity on the network, T token holders can stake and run a decentralized node without relying on any centralized authority. By participating in the DAO and engaging in voting and discussions, T token holders can ensure that the network remains community-driven and decentralized.
Recent Updates:
The live NEO price on June 23rd is $0.02801 USD with a 24-hour trading volume of $143,888,609 USD. It has a circulating supply of 8,800,386,214 T tokens.
Summary
Threshold Network is a blockchain-based platform that provides solutions for user privacy concerns in web3 platforms built on public blockchains. Through its proxy re-encryption service (PRE), Threshold allows users to control access to sensitive data on public networks without exposing the underlying data to any external party or validator. Threshold also offers a decentralized bridge between Bitcoin and Ethereum, called tBTC v2, that provides Bitcoin holders with permissionless access to DeFi and the expanding web3 universe, without the need for a centralized intermediary. Additionally, Threshold Token (T) serves as a utility and governance token, allowing T token holders to run the network through staking and participate in the DAO to ensure community-driven and decentralized governance.
References
https://coinmarketcap.com/currencies/threshold/
https://academy.binance.com/en/articles/what-is-threshold-network-t
https://learn.bybit.com/altcoins/what-is-threshold-network-token/