If you are new to the world of cryptocurrencies, you may have heard of WBTC or WETH and wondered why both Bitcoin and Ethereum have a “W” in them. So what is the difference between WBTC and BTC? And between ETH and WETH?
Here is a simplified explanation, so pay close attention! 👇
First: What is WBTC?
WBTC stands for “Wrapped Bitcoin,” a version of Bitcoin designed to be used on other networks, such as Ethereum.
Difference between BTC and WBTC:
🔹 BTC is the original known Bitcoin, and it runs on its own network (Bitcoin blockchain). It can be likened to the cash you carry in your personal wallet.
🔹 WBTC is a wrapped Bitcoin, meaning it is a version of Bitcoin designed to be compatible with the Ethereum network. This allows it to be used in decentralized (DeFi) platforms and applications built on Ethereum, where the original Bitcoin cannot operate directly.
Second: What is WETH?
WETH is Wrapped Ethereum, a modified version of the original Ethereum to make it compatible with the ERC-20 standard, making it easier to trade on decentralized platforms.
Difference between ETH and WETH:
🔹 ETH is the native currency of the Ethereum network, and is used to pay transaction fees (gas) and transfer between wallets, but it is not automatically compatible with the ERC-20 standard, making it untradable on most decentralized platforms.
🔹 WETH is a wrapped version of Ethereum, ERC-20 compatible, allowing it to be easily traded for other currencies, purchased for NFTs, and used in decentralized applications that do not support the original ETH.
In short, WBTC and WETH are wrapped versions of Bitcoin and Ethereum, created to make them compatible with the Ethereum network, allowing them to be used in decentralized finance (DeFi) and other applications.