Counterparty (XCP) is a peer-to-peer protocol built on top of the legacy Bitcoin (BTC) blockchain codebase. As an asset layer and crypto-derivative platform, its architecture can be integrated to other blockchains.
In an announcement by Julian Smith at the Cryptopulco conference in Mexico, the platform has now opened Counterparty Cash (XCPC) as a distinct Bitcoin Cash infrastructure that will work natively in the Edge mobile wallet, effectively releasing the protocol’s own token for all BCH users.
The Counterparty system allows crypto users to create, transfer, and communicate with other users who hold tokens and digital assets, or even artwork with blockchain-verifiable authenticity. XCPC will provide protocol functionality on the Bitcoin Cash network, and will be used as payment for smart contract executions. It was initialized in 2014 as a revolutionary cryptocurrency through a ‘Proof-of-Burn’ distribution approach which preceded other tokenization efforts such as those offered by the Ethereum network and its ERC-20 protocols.
The Proof-of-Burn distribution event saw BTC users ‘burn’ their assets by sending an amount to the burn address in exchange for XCP. More than 2,000 BTC was ‘burned’ during the event, officially launching and distributing 2.6 million XCP as a full-fledged cryptocurrency.
Holders of XCPC will gain stakes in the protocol running on the Bitcoin Cash chain, and will allow them to vote for or against changes within the protocol’s community. Counterparty also has its own decentralized exchange which facilitates secure and trustless token swaps.
Amaury Sechet, lead developer at Bitcoin ABC, said Counterparty has been “an excellent experiment for Bitcoin (BTC)and will be valuable to users on Bitcoin Cash,” adding that this recent move shows how “this initiative and similar projects working on tokenization and new OP_Codes being enabled in future releases” are all supporting the growth of the Bitcoin Cash ecosystem.
With its existing functionalities derived from the previous implementation, XCPC will provide Bitcoin Cash users with an extensive range of features, including issuance of financial instruments and non-financial tokens, options for underwriting assets, blockchain-verifiable ticketing and licenses, as well as redemption/activation rights all within the Bitcoin Cash (BCH) chain.
The concept of Counterparty Cash rests on its configuration as a ‘meta-protocol’. It makes use of a blockchain-based transaction’s margin to declare specific information regarding tokenized applications.“Bringing this core concept to Bitcoin Cash is a natural extension and useful service to higher frequency on-chain transactions of many business models from financial instruments to bonds, warrants and equity within a project,” said Smith, who is also known for creating a blockchain-based logistics solution called Blockfreight.
Counterparty Cash will bring an ERC-20 protocol with enough weight to compete with the earlier derivatives platform affiliated with BTC, according to Smith. Bitcoin Cash’s cost-efficient network and reliable confirmation times will effectively enable future implementations like the construction of a distributed exchange within the network, allowing users to swap tokens without further any third-party processor.