Developers are increasing the integration of Bitcoin, the world’s largest cryptocurrency, into the Cosmos network, a development that’s causing waves of excitement and hesitation within the crypto community. Through the efforts of Osmosis, a noteworthy decentralized exchange (DEX) on Cosmos, it will soon be possible for users to shift their Bitcoins onto the Cosmos network with the use of Osmosis’ Nomic bridge. A fee of 1.5% of the transaction value is, however, required which could raise eyebrows among frugal investors.
The touted end product after transposition is Nomic Bitcoin (nBTC), an IBC-compatible token created by the Nomic Chain. The transfer reconciles a 1:1 ratio, bringing into fruition the vision of expanding the usage of Bitcoin (nBTC version) across the over 50 Cosmos-linked app chains. While the development prompts envisioning the mushrooming of Bitcoin usability, the transaction charge raises the question of whether the cost is justified for crypto enthusiasts with a tighter grip on their coffers.
The unveiled product, the nBTC Interchain Upgrade, is scheduled for release in late October. Through a strategic partnership with decentralized finance protocol Kujira, Bitcoin holders can send their crypto to the Sonar wallet address of the said protocol. This allows for self-custody of nBTC, a move that offers the security and control needed by sceptics of a decentralized financial system.
A significant point of interest is the possibility of utilizing nBTC as collateral to mint Kujira’s indigenous stablecoin USK. Crypto investors can also engage in lending and borrowing within the ecosystem, providing liquidity and incentivising the usage of nBTC. However, considering these functionalities might not be appreciated by all, it does open up the platform to a degree of unpredictability and risk for cautious investors.
The constraints come in the form of a hard cap of 21 BTCs for the cross-chain bridge at nBTC’s initial stages. This limit might frustrate high-volume investors keen to traverse the new bridge. Yet, it does provide a safety net, preventing the bridge from reaching overload, eventually enforcing a phased approach that retains the security of the system.
The Cosmos network is advancing its blockchain technology, pioneering expanded Bitcoin usage through the nBTC Interchain Upgrade. More freedom, liquidity, and functionality are on offer – but for a price. The question many crypto enthusiasts find themselves asking is whether the benefits outweigh the associated risks and costs. The growth and development of the Cosmos network may hinge on how its demographic chooses to answer this question.
Source: Cointelegraph
