Counterparty is an open-source protocol layer that executes its functions on the Bitcoin blockchain. The protocol brings a variety of advanced features to Bitcoin, specifically through its use of smart contracts. Users can use Counterparty to create and trade any token on Counterparty’s wallets. Counterparty also aims to be compatible with the Lightning Network in the future, allowing for faster asset exchange through its payment channels. The Decentralized Exchange allows users to exchange any Counterparty token for Bitcoin. The Counterparty token is created through the burning of Bitcoin in order to establish the legitimacy of Counterparty and set it apart from other “altcoins”.
Counterparty (XCP), the primary token of the Counterparty platform, is used for smart contract execution, voting for changes, and paying the fee for asset creation.