Counterparty seems unstoppable these days. Its founders held a Reddit AMA yesterday to update the participants on several ground-breaking projects.
AMA means “Ask Me Anything” – Reddit users can ask the host all sorts of questions about any topic. Many Bitcoin personalities have hosted Reddit AMAs to connect with a global online audience, including Julian Assange, Gavin Andresen, Chief Scientist at the Bitcoin Foundation, and the Blockstream team.
Last month, in a keynote address at Inside Bitcoins Las Vegas, Overstock.com CEO Patrick Byrne announced a partnership with Counterparty to build a cutting-edge stock market, code-named Medici, on top of the Bitcoin blockchain, and help Bitcoin do for Wall Street what it has already begun to do for payments.
Last week, Counterparty announced that its developers have successfully ported the Ethereum Project’s programming language over to the Counterparty platform, enabling users to save and execute Turing Complete Ethereum code on the Bitcoin blockchain. With this new development, Counterparty makes it possible to execute Ethereum smart contracts on the more secure Bitcoin blockchain.
The AMA was hosted by the founders Robby Dermody, Evan Wagner and Adam Krellenstein. The hosts offered a concise summary of recent news:
“Counterparty has been chosen by Overstock.com to be the platform on which it will build Medici, the world’s first SEC-regulated stock market for cryptosecurities. Counterparty also recently announced that it has ported Ethereum’s entire smart contracts platform, allowing users to write Turing Complete smart contracts into the Bitcoin blockchain and execute those contracts in a completely decentralized and trustless manner.
Is there a way to keep Counterparty, but get rid of the altcoin? If Blockstream (sidechains) delivers, would you consider moving to a sidechain to have features like faster block times, 100% btc currency, etc..
XCP isn’t really an altcoin, as it’s not an alternative to BTC and BTC can be used directly within the Counterparty protocol for many things. However, much of Counterparty’s advanced functionality simply requires the existence of a new currency that is “aware” of the new features. This includes the new smart contract functionality, where XCP is used to fuel the execution of these contracts. Sidechains are highly theoretical and still have major security concerns. However, if these problems can somehow be overcome, we’d certainly consider moving to a sidechain.
XCP is used to provide functionality where it isn’t technically possible to use BTC, for instance in paying for the execution of all smart contract code (as Ether is used in Ethereum). Beyond that, it is used for the binary options functionality and when reserving some asset names. More generally, it represents stake in the protocol, and will be used for voting on protocol changes and judging community sentiment.
Any hints you guys can give on the development process of “Medici” or what we could expect to come from this innovation once it’s officially released? Really just anything concerning “Medici” would be awesome to hear. Thanks for creating such an incredible platform for open source finance!
We have to remain rather tight lipped around Medici, but we would like to have the readers consider that the size of the stock market is estimated as $55 trillion, and the bond market size is estimated at nearly $100 trillion. Not only we, but several individuals we know (who are involved very deeply with the financial industry in large firms at executive levels) feel that in the near future, most, if not all financial instruments like stocks and bonds will be traded on a blockchain of some sort. Just let that sink in… That is the potential here!
Is there some simple article that explain Counterparty ethereum script system? And comment it thoughtful? In particular I want to understand why this system can’t be implemented also on coloredcoin or other system, for free: without the need to buy XCP, of pay XCP fees.
The Counterparty smart contracts system is really the same thing as the Ethereum one: an infinitely powerful programming language for writing decentralized applications of any kind. Moreover, they’re designed to be nearly 100% compatible, so that any code you write for one platform will be immediately executable on the other.
Colored coins simply isn’t a powerful-enough protocol to implement a smart contracts system. To quote Peter Todd:
“There’s a lot of stuff that’s better done with the much simpler colored coin technology, but equally, there’s a lot of stuff colored coins just can’t do for technical reasons. In short, if you want to play around with Ethereum-style smart contracts in a decentralized system, you need a token of value like XCP.”
Can you please give us a summary of the email you received from [Ethereum] once you broke ‘the’ news?
We didn’t receive any e-mail from Ethereum when we announced that we had ported their smart contracts system to Counterparty. We do communicate regularly however, as we’re all working towards the same goal.
Is my understanding correct that Bitcoin scripts are executed by the miner who mine the block, while Counterparty instructions are only recorded on the blockchain, but executed by Counterparty nodes? Otherwise how is the Turing-completeness possible? Thanks.
Bitcoin scripts are executed by all Bitcoin full nodes. Counterparty contract code is stored in the Bitcoin blockchain and executed by all Counterparty nodes (that is, computers running counterpartyd).
How soon can we expect to see regulatory approval of Medici?
Ultimately, the time-frame for regulatory approval is largely out of our hands, but we are taking all the necessary steps to get it done as soon as possible. We’re working with some extremely talented and experienced people!
What do you think of the march of Counterparty! Comment below!
Images from Counterparty and Shutterstock.