### What is tBTC?

tBTC is a decentralized, permissionless Bitcoin bridge developed by the Threshold Network to bring Bitcoin (BTC) liquidity to Ethereum and other EVM-compatible networks. It operates as a trustlessly Bitcoin-backed ERC-20 token, enabling participation in Ethereum's decentralized finance (DeFi) ecosystem without relying on centralized custodians.

### How does tBTC work?

tBTC functions by allowing users to deposit Bitcoin into the tBTC bridge, which is secured through threshold cryptography. The deposited Bitcoin is managed by a randomly selected group of node operators from the Threshold Network. These operators require a majority agreement before performing any actions with the Bitcoin, and their selection rotates weekly to prevent malicious control. Users can then mint tBTC, an ERC-20 token fully backed 1:1 by the deposited Bitcoin, to use within Ethereum's DeFi applications. The process involves generating Bitcoin wallets, deposit sweeping, and optimistic minting to ensure security and efficiency.

### What are the potential use cases for tBTC?

tBTC has several potential use cases, particularly in the DeFi space:

1. **Lending Platforms:** It can be used as collateral for loans, enabling Bitcoin holders to earn interest.
2. **Yield Farming:** Users can engage in yield farming protocols to earn passive income.
3. **Cross-Chain Compatibility:** tBTC allows for seamless movement of Bitcoin across blockchains, enhancing its reach.
4. **Payment Solutions:** It facilitates decentralized exchanges and peer-to-peer payments using Bitcoin on Ethereum.
5. **Partnerships and Integration:** Collaborations with entities like Wormhole and DAOs expand its cross-chain functionality and utility in various sectors.

### What is the history of tBTC?

tBTC was developed by the Threshold Network following a merger between NuCypher and Keep. It has evolved from its initial version, tBTC v1, which used an over-collateralized model, to the more efficient tBTC v2. This latest version employs probabilistic guarantees and a distributed node selection to enhance scalability and security. Key milestones include security audits, integration with Layer 2 networks, and a focus on cross-chain functionality. Noteworthy partnerships, such as with Wormhole, have bolstered its market presence and expanded its usage across multiple blockchain ecosystems.

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