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Discover CounterParty's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is CounterParty?

Counterparty (XCP) is an open-source, decentralized platform built on top of the Bitcoin blockchain. It enables users to create and trade custom digital assets, execute smart contracts, and engage in decentralized financial transactions. XCP is the native currency of the platform, used for transaction fees, smart contract execution, and governance voting. Counterparty aims to democratize finance by providing secure, trustless, and open financial tools, extending the functionality of the Bitcoin blockchain.

How is CounterParty used?

Counterparty (XCP) is the native cryptocurrency of the Counterparty platform, which extends the functionality of the Bitcoin blockchain. XCP is used for various purposes within the platform:

  1. Asset Creation: XCP is required to create custom named assets, which carry a small anti-spam fee. This fee is burned, removing it from circulation, to discourage spam and squatting.

  2. Decentralized Exchange: XCP is used to facilitate trustless exchanges of assets on the platform's decentralized exchange (DEx).

  3. Smart Contracts: XCP is involved in the execution of smart contracts, allowing for more complex financial applications on the Bitcoin blockchain.

  1. Callbacks: XCP is used to perform callbacks on callable assets, enabling more advanced interactions within the platform.

In summary, XCP serves as the fuel that powers the Counterparty platform, enabling users to create and trade assets, execute smart contracts, and perform various other functions within the ecosystem.

How do I store CounterParty?

To store Counterparty (XCP) tokens, you have several options based on your needs and preferences:

  1. Store on an Exchange:

    • Hold your XCP on a centralized exchange (CEX) like Binance Wallet. This provides easy access to trading and other features but may pose security risks if the exchange is hacked.
  2. Non-Custodial Wallets:

    • Use a self-custodial wallet like Trust Wallet, hardware wallets, or paper wallets. This gives you complete control over your private keys, ensuring security but requiring more management effort.
  3. Cold Wallets:

  • For long-term storage, consider cold wallets, which are offline and more secure. Options include paper wallets and hardware cold wallets like USB drives. These are ideal for large holdings and provide maximum security.

Choose the method that best fits your needs, balancing convenience and security.

How to buy CounterParty?

To buy Counterparty (XCP) tokens, follow these steps:

Using a Crypto Wallet
  1. Choose a Wallet: Select a reliable and reputable crypto wallet that supports Counterparty (XCP). Popular options include Coinbase Wallet, MetaMask, and TrustWallet.
  2. Download and Set Up: Download the wallet application and create a new wallet address or import an existing one. Make sure to write down the seed phrase and keep it secure.
  3. Buy Counterparty (XCP): Purchase XCP directly using a supported payment method. If not available, buy a popular cryptocurrency like USDT and then exchange it for XCP through your wallet or on a decentralized exchange.
Using a Centralized Exchange
  1. Choose an Exchange: Select a reliable and trustworthy crypto exchange that supports Counterparty (XCP) purchases. Consider ease of use, fee structure, and supported payment methods.
  2. Create an Account: Enter required information, set a secure password, and enable 2FA for added security.
  3. Verify Identity: Complete KYC verification, which may vary based on your nationality and region.
  4. Add Payment Method: Follow the exchange's instructions to add a credit/debit card, bank account, or other supported payment method.
  5. Buy Counterparty (XCP): Use fiat currency if supported or buy a popular cryptocurrency like USDT and then exchange it for XCP.
Additional Tips
  • Research and compare fees, liquidity, and trading pairs before making a purchase.
  • Start with small amounts to avoid risks and be aware of market trends, trading fees, and crypto taxes.
  • Diversify your portfolio to spread risks and raise the chances of success.
  • A leading crypto exchange for buying and trading XCP.
  • KuCoin: A centralized exchange that supports XCP purchases.
  • Scarce City: A marketplace for buying and storing Bitcoin NFTs, which often use XCP.
  • A comprehensive table featuring XCP rates from various exchanges.
  • BitScreener: A guide to buying XCP with detailed steps and tips.
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History of CounterParty

Counterparty (XCP) is an open-source, decentralized platform that extends the functionality of the Bitcoin blockchain. Launched in 2014, it allows individuals to create and trade any kind of digital token, conduct both fungible and non-fungible token exchanges, execute smart contracts, and even attach data to individual Bitcoin transactions. This platform creates a layer of advanced features on top of the Bitcoin network, thereby enriching its base capabilities.

Origin and Distribution

XCP, the native cryptocurrency of Counterparty, was created through a process known as "proof of burn." In this unique process, Bitcoin users could acquire XCP by sending their Bitcoins to an address where they were verifiably unspendable, or "burned." This method ensured a fair distribution of tokens, as it did not provide preferential treatment to any individual or group. Over 2,100 Bitcoins were burned, creating about 2.6 million XCP in January 2014.

Key Features and Innovations

Counterparty's true innovation lies in its use of the Bitcoin blockchain to host additional, complex features. By using Bitcoin's security and stability as a foundation, Counterparty allows the creation of new digital assets and the execution of smart contracts, comparable to Ethereum's functionality but within the Bitcoin ecosystem.

Contribution to Digital Art and NFTs

Counterparty played a crucial role in the early history of digital art and crypto collectibles. The platform facilitated some of the first instances of art being tied to NFTs (Non-Fungible Tokens), most notably with the launch of Rare Pepes, a collection of unique, tradeable Pepe the Frog memes. This marked one of the earliest uses of blockchain technology for creating, owning, and trading digital art, contributing significantly to the evolution of the broader NFT space.

Timeline and Development

Counterparty has a rich history of updates and improvements. The platform has undergone numerous bug fixes, updates, and new feature additions, including Oracled Dispensers and Reset Token Divisibility for Unused Assets. Additionally, the community has been actively involved in funding initiatives and contributing to the development of the platform.

Current Status and Future

Today, Counterparty continues to evolve, with ongoing efforts to organize and document its vast historical assets and projects. The community remains active, and the platform continues to expand its capabilities, ensuring a bright future for XCP and its users.

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How CounterParty works

Counterparty (XCP) is a cryptocurrency project that operates on the Bitcoin blockchain. It allows users to create and trade their own digital assets, known as user-created tokens, within the Bitcoin ecosystem. Here's how it works:

Creating Assets

Counterparty enables users to issue their own digital tokens, which can be named or numeric. Named assets require a small anti-spam fee of 0.5 XCP, while numeric assets are free to create. These tokens are stored and transferred using Bitcoin transactions, but they are not tied to the BTC balance of any address. This means that sending or receiving Bitcoin does not affect the balance of tokens.

Decentralized Exchange

Counterparty supports a decentralized exchange (DEX) where users can trade assets without the need for a middleman. This peer-to-peer exchange is trustless, meaning that users do not need to rely on a third party to facilitate transactions.

XCP Token

The native currency of Counterparty is XCP, which was created by burning Bitcoins in January 2014. This method, called "proof of burn," ensures that the initial distribution of XCP was fair and decentralized. XCP is used to create new assets, make bets, and perform callbacks on callable assets. It is slightly deflationary, with approximately 2.6 million XCP in circulation.

Transactions and Storage

Counterparty transactions are essentially Bitcoin transactions with additional data. This data is used by Counterparty nodes to interpret and process the transactions. Users can store their XCP and other assets in the Counterwallet, which is a web-based wallet that showcases all protocol features.

Security and Open Source

All Counterparty software is open source and has been formally reviewed by well-known Bitcoin security experts. This ensures that the platform is secure and transparent, with no central authority controlling it.

Key Features
  • Asset Creation: Users can create their own digital tokens with custom names or numeric identifiers.
  • Decentralized Exchange: Trustless trading of assets without the need for intermediaries.
  • XCP Token: The native currency used for creating assets, making bets, and performing callbacks.
  • Security: Open source software with formal security reviews.

Overall, Counterparty provides a platform for users to create and trade their own digital assets within the Bitcoin ecosystem, leveraging the security and decentralization of the Bitcoin blockchain.

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CounterParty's strengths

The token Counterparty (XCP) has several strengths that make it a valuable asset in the cryptocurrency market. Here are some of its key advantages:

  1. Native Currency: XCP is the native currency of the Counterparty platform, which means it is specifically designed to be used within the network. This provides a seamless experience for users and ensures compatibility with all Counterparty features and functionalities.

  2. Security: XCP is built on top of the Bitcoin blockchain, which provides a high level of security and immutability. This ensures that transactions conducted with XCP are reliable and trustworthy.

  3. Custom Tokens and Smart Contracts: XCP allows for the creation of custom tokens and smart contracts on the Counterparty network, enabling users to build decentralized applications and execute complex financial transactions.

  1. Decentralized Exchange: The Counterparty network offers a decentralized exchange where users can trade XCP and other tokens directly, without the need for intermediaries. This enhances liquidity and reduces transaction costs.

  2. Stake in the Protocol: XCP ownership is a stake in the protocol/network, which is vital for democratic consensus about the future direction of the protocol. This ensures that holders of XCP have a say in the development and governance of the platform.

  3. Limited Supply: There are only 2.6 million XCP tokens in existence, which can lead to increased demand and value if the Counterparty platform gains popularity.

  1. Fast and Cheap Trading: Trading with XCP on the distributed exchange is cheaper and faster than with Bitcoin, making it an attractive option for users who need to conduct frequent transactions.

  2. Flexibility: XCP can be used for various financial activities, including betting, CFDs, and asset callbacks, making it a versatile asset for users.

  3. Open Source: The Counterparty software is open source, which allows for community involvement and review, ensuring that the platform is secure and transparent.

  1. Compatibility: XCP is natively tied to Bitcoin wallets, but it can also migrate to a different blockchain if needed, providing a level of flexibility and adaptability.

These strengths make XCP a valuable asset for users who want to leverage the features and functionalities of the Counterparty platform.

CounterParty's risks

Counterparty (XCP) is a cryptocurrency project that operates on the Bitcoin blockchain. As a cryptocurrency, it is exposed to various financial risks, particularly those related to counterparty risk. Here are some of the key financial risks associated with Counterparty (XCP):

  1. Counterparty Risk: Counterparty risk is the likelihood that one party involved in a transaction may default on its contractual obligations. This risk is prevalent in financial transactions, including those involving cryptocurrencies like XCP. It can manifest in credit, investment, and trading transactions, and can result in financial losses if the counterparty fails to meet its obligations.

  2. Default Risk: Default risk is a specific type of counterparty risk that occurs when a borrower fails to repay a loan. This risk is particularly relevant in lending platforms and decentralized finance (DeFi) protocols, where XCP may be used as collateral or for lending purposes.

  3. Credit Risk: Credit risk is another type of counterparty risk that arises when a borrower's creditworthiness is in question. This risk is often assessed through credit scores, which can influence the interest rates or premiums charged on loans. In the context of XCP, credit risk can affect the value of the cryptocurrency if borrowers default on their obligations.

  1. Market Risk: Market risk refers to the potential losses that can occur due to changes in market conditions, such as fluctuations in the value of XCP. This risk can be managed through diversification and hedging strategies, but it remains a significant concern for investors and traders.

  2. Liquidity Risk: Liquidity risk arises when there is a lack of buyers or sellers in the market, making it difficult to buy or sell XCP at a fair price. This risk can be exacerbated by low trading volumes or market volatility.

  3. Operational Risk: Operational risk includes the potential for losses due to inadequate or failed internal processes, systems, and people, or from external events. This risk can affect the security and reliability of XCP transactions and storage.

  1. Regulatory Risk: Regulatory risk arises from changes in laws, regulations, or government policies that can impact the use and value of XCP. This risk can be significant, as governments and regulatory bodies continue to evolve their approaches to cryptocurrencies.

  2. Smart Contract Risk: Smart contract risk is specific to DeFi protocols and other applications that use automated contracts. This risk arises from potential coding errors, vulnerabilities, or unintended consequences in these contracts, which can lead to financial losses or manipulation of contract terms.

  3. Exchange Risk: Exchange risk occurs when users rely on centralized exchanges to buy, sell, or store XCP. These exchanges can be vulnerable to security breaches, insolvency, or mismanagement, posing significant counterparty risks to users.

  1. Custodial Risk: Custodial risk arises when users rely on third-party services to store their XCP. These services can be susceptible to security breaches, insolvency, or mismanagement, leading to potential losses for users.

To mitigate these risks, it is essential for users and investors to conduct thorough due diligence on counterparties, exchanges, and other service providers. Additionally, implementing risk management strategies such as diversification, hedging, and insurance can help minimize the potential impact of these risks.

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Did CounterParty raise funds?

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CounterParty's ecosystem

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CounterParty’s team

  • Adam Krellenstein: Co-founder of Counterparty, involved in the development of the platform, and continues to work on it full-time.
  • Evan Wagner: Co-founder of Counterparty, involved in the development of the platform, and has worked on the Medici project with Overstock.
  • Robby Dermody: Co-founder of Counterparty, involved in the development of the platform, and has worked on the Medici project with Overstock.

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