Guest Post by Aki Balogh, CEO and Co-founder of DLC.Link

Building Trust in Bitcoin and Cryptocurrencies: A Path Forward
In a guest post for DLC.Link, CEO and Co-founder Aki Balogh addresses the critical issue of restoring trust in Bitcoin (BTC) and cryptocurrencies. BTC, initially designed to decentralize ownership, has seen centralization of assets, often leading to negative outcomes. Wrapped BTC (wBTC) allows BTC to be used across various blockchain ecosystems, enhancing financial inclusion and potentially improving institutional perspectives on the industry.
However, wBTC relies on centralized custodians like BitGo, raising concerns about custodial risks, especially as BTC’s value is projected to rise. Failures, bad trades, or regulatory actions could jeopardize users’ life savings, with FDIC insurance not covering non-bank custodians.
Balogh highlights that most wrapped BTC options replicate these risky custodial models, despite the demand for BTC in decentralized finance (DeFi). Bitcoin ‘Layer 2’ solutions add complexity and risk, often without full disclosure.
To counteract this, Balogh suggests using discreet log contracts (DLCs) within Bitcoin, allowing users to maintain self-custody through a federated merchant network. This method, unlike custodial models, ensures the integrity of wrapped tokens.
Balogh advocates for prioritizing safety, user control, and responsible innovation to rebuild trust in BTC. He calls for 2024 to be the year of moving forward with secure wrapping solutions, thereby unlocking Bitcoin’s true potential and revolutionizing finance.