Counterparty recently experienced its millionth transaction. This is good news for the bitcoin-based smart contracting platform. It appears the Counterparty ecosystem is developing healthily and rapidly.
Counterparty’s community manager, Shawn Leary, told bitcoin.com about their growth: “Counterparty was excited to see our one millionth transaction occur a few days ago. It was, ironically, someone sending the illusive SQUATCHPEPE digital trading card. The lead developer for RarePepeWallet.com (RPW), Joe Looney, sent out a tweet commemorating it…The one million mark is a clear statement that this second layer protocol is getting a ton of usage.”
Speaking of trading cards, Leary mentioned Counterparty has been a conduit for the creation of various game-based ICO’s on the bitcoin blockchain, including STORJ, Augmentors.com, RarePepe.Party, SpellsofGenesis.com, and others. However, Counterparty also harbors its own native digital coin.
Counterparty, XCP, and Smart Contracting
Counterparty and its token, XCP, was officially released in January 2014. The current market price of XCP is sitting around $8.00, according to coinmarketcap.com. Counterparty was implemented as an open source protocol designed to allow smart contracting functions to take place on the bitcoin blockchain. It also allows users to create and trade a variety of cryptocurrency assets. Mr. Leary elaborated on its functionality:
It’s 100% Bitcoin. The entirety of the Counterparty database is contained within the strongest and longest chain. Counterparty nodes do not communicate with each other, they only send carefully encoded bitcoin messages detailing where and when assets are being created and moved. Each Counterparty node parses the Bitcoin blockchain and recreates the exact history of Counterparty. One of our community members, Dan Anderson, summed it up with a revealing tweet about just how much spam on the chain is ours! https://twitter.com/droplister/status/885715181472333824
Proof of Burn Versus Initial Coin Offerings
XCP was originally created through a process called “proof of burn.” Investors and interested parties sent bitcoin to an “unspendable address” in exchange for XCP tokens. Counterparty decided to generate tokens in this manner to create an equal and fair environment for investors and developers. Leary commented on burning bitcoin, saying, “They burned all of the bitcoins raised! Talk about having confidence and dedication to a project. It was a one time, one way peg of value, BTC to XCP. 2,130 Bitcoin were burned, equal to $6.4M just a few weeks ago.”
This process differs from Initial Coin Offerings on for instance Ethereum. Rather than generating tokens via “proof of burn,” some ICO’s print the tokens via a “premine” or “instamine” process and investors send ethereum or bitcoin directly to the startup and its developers, hoping to gain profits and operation funds along the way.
Counterparty with all of its innovative features, likely has a bright future ahead of it. Leary mentioned they have two hard working developers and they plan on implementing Counterparty improvement proposals soon. He detailed the team’s future plans:
We currently have two very active developers, Devon Weller and Ruben de Vries who are guiding the continued CIP (Counterparty Improvement Proposal) process along. CIP 9 and CIP 10 which will reduce fees and several more in the pipeline that could bulk deliver asset transfers to save on fees. We are planning for Bitcoin fees to continue going up, but would not be too upset if the fees came down with Segwit activation.
Finally, Leary told bitcoin.com that he loves his Counterparty community. He mentioned he is constantly impressed by the hard work and determination exhibited by team members. He said they have a panoply of amazing artists, gamers, and crypto enthusiasts of all stripes.
Do you believe Counterparty has a bright future? What other applications will it bootstrap to the bitcoin blockchain? Let us know in the comments below.
Images via Shutterstock and Redbubble.com
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