Platforms minting NFTs (non-fungible tokens) are in vogue today. Some people forget that the NFT projects started with bitcoin 2.0 platforms around 2014, and one of the main proponents of that era was Counterparty.
So what services does Counterparty offer today, and is it a good place to create tokens and smart contracts? Our Counterparty review covers all you need to know about this enduring bitcoin 2.0 platform.
What is Counterparty?
Counterparty was founded in 2014 as an open-source internet protocol. It was part of the bitcoin 2.0 generation of platforms that developed “metacoins” to allow users to trade and invest in commodities beyond the bitcoin cryptocurrency itself.
It lets users create custom tokens through its network that are attached to the bitcoin blockchain. These tokens are as secure as the bitcoin network; they exist as “metadata” to blocks. This is useful for traders because it allows for more complex transactions than simply trading currency. These transactions are known as smart contracts.
Smart contracts built on Counterparty are contracts that will come into action when a certain set of conditions has been fulfilled. This makes the contract much more secure than a written arrangement, as the contract is secured by the bitcoin blockchain (which is virtually incorruptible due to the enormous power of its computing network).
Counterparty has a bespoke currency, XCP, which can be purchased on several major exchanges. XCP is used as payment when users create certain types of tokens. Staking XCP also gives users voting privileges on the future direction of the platform.
XCP was initially generated by “burning” bitcoins. This meant building a stable pool of currency by sending bitcoins to a provably unspendable wallet. It took this approach to ensure that XCP was distributed equitably through the community and not monopolized.
How Does Counterparty Work?
Users interested in minting a token using Counterparty can pay small fees in XCP and/or bitcoin to create an NFT – NFT is the name given to bitcoin 2.0 tokens today.
Counterparty is an open-source project and is always looking for new developers to help build and improve the platform.
Creating a Token Using Counterparty: Step-by-Step Guide
Creating a token is simple. Here’s how to get started:
- Purchase bitcoin. If you don’t own any BTC currently, you’ll need to buy some through an exchange. The platform runs on the bitcoin network, so some payments must be made in bitcoin.
- Create a wallet. The platform offers several types of wallets – you’ll need to create one for your transactions.
- Purchase XCP (if needed). You won’t need XCP to create a numeric token, but if you want to create a sub-asset or alphanumeric token, you’ll need a small amount.
- Create your token. Counterparty provides the code for all tokens and smart contracts on its platform.
Who is Counterparty For?
How much do you need to create a token on Counterparty? At the most basic level, very little. There are several options:
- Users can pay 0.5 XCP and a small bitcoin fee for anti-spam measures to create a unique alphanumeric (named) token. These are often more attractive to buyers as they’re unique.
- You can pay an anti-spam fee of 0.25 XCP to create a sub-asset.
- Creating a numeric token is free except for the bitcoin miners’ fee.
These tokens are attached to real-world assets and can be bought or traded. The platform is designed for anyone interested in creating smart contracts and tokens rather than simply trading BTC.
Who is Behind Counterparty?
The platform is developed by Robby Dermody, Adam Krellenstein, and Ouziel Slama. It was founded in 2014 as part of a wave of bitcoin 2.0 projects.
What Makes Counterparty Unique?
Its endurance as a crypto platform is impressive. It also offers named NFTs, which aren’t available on many other chains.
Counterparty makes it easy and affordable for users to create tokens and smart contracts that are secured by the powerful bitcoin blockchain. Check out its “get started” page to learn more.
How do you get Counterparty?
XCP can be purchased on most major crypto exchanges.
What is a Counterparty wallet?
There are several types of wallets on the platform – these can be used for tokens, bitcoin, and XCP.