What is the 2-Way Peg?

The 2-Way peg is often said to be a method to transfer BTC into SBTC and vice-versa. In practice, when BTC are exchanged for SBTC, no currency is “transferred” between blockchains. There is no single transaction that does the job. This is because Bitcoin cannot verify the authenticity of balances on another blockchain. When a user intends to convert BTC to SBTC, some BTC are locked in Bitcoin and the same amount of SBTC is unlocked in RSK. When SBTC needs to be converted back into BTC, the SBTC get locked again in RSK and the same amount of BTC are unlocked in the Bitcoin blockchain. A security protocol ensures that the same Bitcoins cannot be unlocked on both blockchains at the same time.