Counterparty (platform)

Counterparty is a peer-to-peer financial platform and a distributed, open source protocol built on top of the Bitcoin blockchain and network. It was one of the most well-known "Bitcoin 2.0" (later known as non-fungible token) platforms in 2014, along with Mastercoin, Ethereum, Colored Coins, Ripple and BitShares.

It is a "metacoin"-type protocol, and provides features such as tradable user-created currencies, additional financial instruments and a decentralized asset exchange.

Over time, it has developed a strong user base, mostly due to the protocol hosting the non-fungible token collections Spells Of Genesis (2015) and Rare Pepe (2016).

History
In November 2014, Counterparty added support for the Ethereum Virtual Machine (EVM) to the Counterparty protocol, allowing all Ethereum decentralized applications to be run on the Bitcoin blockchain within the Counterparty protocol.

In 2014, Counterparty was part of a plan by Overstock.com to issue and trade legal securities on a blockchain. The initiative, originally named "Medici", eventually became Overstock's tZERO.

In August 2014, Dogeparty, which is based on Dogecoin, was forked off Counterparty, offering lower fees and faster transaction times.

In March 2015, a company called EverdreamSoft released the blockchain trading card, FDCARD, on the Counterparty platform that was later usable in their blockchain game Spells Of Genesis.

In early 2024, after a hiatus in development, some core developers returned to fix long-standing issues with stability, correctness and performance of the Counterparty reference implementation, and to prepare for future feature development.

XCP Currency
Counterparty has a native currency, XCP, which is used in the protocol to create new assets, make bets and callback callable assets issued with Counterparty. The currency was created during January 2014 by 'proof of burn', an alternative to a crowdsale or 'initial coin offering' (ICO).

The initial creation of XCP through this process involved sending about 2140 BTC, worth between US $1.6 million and US $2 million at the time, to a provably unspendable Bitcoin address. The decision to use proof of burn to issue XCP, instead of a more traditional fund-raising technique for alt-coin launches, is to keep the initial distribution of funds as fair and decentralized as possible, increase the project's legitimacy and avoid potential legal issues.

Wallets
counterpartyd is the reference implementation of the Counterparty protocol, and Counterwallet is a deterministic web-wallet frontend to counterpartyd, in which all cryptography is handled client-side. Both are open-source and hosted on GitHub.

Freewallet (mobile and desktop) has become a more popular wallet with the Spells Of Genesis & Memorychain/Oasis Mining communities, while the Rare Pepe wallet targets Rare Pepe collectors specifically.