Counterparty is another type of cryptocurrency currently available in the trade market. It was first introduced in 2014 by the developers Robby Dermod
To use the Counterparty, users must have a web wallet. This web wallet is called Counterwallet that contains all of its protocol features. The Counterparty currency uses the symbol, XCP.
XCP was initially issued using a method of “proof of burn.” Through this method, bitcoins will be sent to a special address that makes the coins not available for spending. This was done to ensure that the developers and its users have equal opportunities for the Counterparty. XCP is the world’s first decentralized digital currency that is actually working and has the ability to let the users create new assets, perform wagers, and make call back for assets that still can be redeemed. Counterparty currency also has the ability to issue dividends and create price feeds.
The assets that can be created are actually tokens, commonly known as user-created tokens. These tokens can function as real as XCP but they are separate from the XCP currency. Tokens can be sent and received from any address inside the Bitcoin blockchain. Exchanges and distribution of Counterparty tokens are allowed but this will not consequently affect the balance of XCP. In the same way, sending and receiving of bitcoins will not affect the balance of the tokens. All of these features can be accessed through the Counterwallet.
In addition, the improved technology of Counterparty is in its own program known as Smart Contracts. This kind of contract is a digital agreement written by Counterparty users and can be executed only within the Bitcoin blockchain. With the use of Bitcoin’s decentralized ledger and Counterparty’s built-in scripting language, real world situations can be written and executed into codes without the need of third party authorities.