Hey Jesspeculators
The cryptocurrency market has primarily been about trading value, getting in and out of Bitcoin or other coins and back into fiat or stablecoins. Exchanges facilitated that, while centralised exchanges have improved their service over the years, the market has moved towards non-custodial trading with the growth of decentralised exchanges or DEX's.
Many of the markets most popular DEX's are built on Ethereum or BSC, with Uniswap and Pancakeswap taking up a lot of the headlines with their growth in liquidity. But they are not the only game in town, other chains offer DEX's too, and even Bitcoin will have DEX's.
At the moment, something resembling a DEX would be Counterparty.
What is Counterparty?
The Counterparty protocol is an open-source and extensively tested protocol that allows users to build on the Bitcoin blockchain. Its primary function is to allow users to create and trade any digital token; Counterparty enables anyone to write smart contracts and execute them on the Bitcoin blockchain.
Using Bitcoin’s decentralized ledger network and Counterparty’s built-in scripting language, real-world scenarios can now be transformed into code and executed automatically with no need for an intermediary.
Counterparty extends Bitcoin’s functionality by “writing in the margins” of regular Bitcoin transactions similar to what we see with DLC's and helps open the door for innovation and advanced features not possible with ordinary Bitcoin software.
Token issuance XCP token
The one issue I have with Counterparty.io is that it has a native currency which I don't think it's really needed. Counterparty token is called XCP, which was created during January 2014 by 'proof of burn', a unique alternative to a crowdsale or ICO, designed to maximize the project's legitimacy by eliminating any possible source unfairness in the launch.
Unlike other currencies, XCP is mined by sending Bitcoin to an unspendable address, but why would I want to burn my Bitcoin for another coin? I don't see the value in it.
Burning BTC as a fundraiser
To create XCP in the network, 2140 BTC, worth between US$ 1.6 million and US$ 2 million at the time, was destroyed by sending them to a provably unspendable Bitcoin address. This was done to avoid potential legal issues. I get they wanted to avoid being seen as a "security", but still not a huge fan of this model.
Counterparty on lightning
The integration of the lightning network is currently under development, and payment channels will be set up to support the rapid exchange of assets and are compatible with the Lightning Network.
The update will allow for the use of uni- or bi-directional payment channels with Counterparty tokens. Future work will allow the use of the Lightning Network with Counterparty, enabling the rapid, decentralized and off-chain exchange of tokens that settles onto the Bitcoin blockchain.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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