Do you Need a Separate Wallet for each Altcoin?
Ans O'Connor writes in again asking if we can use the same wallet software to manage multiple coins. It's a great beginner question, and really illustrates how ...
What's up, party people? Chris Derose here, Community Director of the Counterparty Foundation and today, we're answering a question from Ans O' Connor, who has a series of great questions. Today's question is, do you need a separate wallet for each altcoin? So, yeah, let's talk about it. Yeah, this is a really confusing thing for people at first, I think, because, you know, we talk about like it's this world of currencies perhaps, that I guess would be accessed the same way that your web browser accessed the world wide web. But, in fact, you do need a separate wallet for each altcoin. Every single one of them does require its own separate software and many of them are all very different. So, if you typically look at something, let's say litecoin, for example.
Litecoin has a wallet that is very much inspired by bitcoin. There's a command line version and I believe there's a graphical version, as well, and that would be one wallet just for litecoin. Whatever you did in that wallet would not apply to the bitcoin network and, similarly, anything in the bitcoin network would not apply to litecoin. Now, there is a little bit of an exception to this rule, and that is with Counterparty. That's what I'd like to talk about. What Counterparty does is allow you to have separate, they're called metacoins or tokens, user defined tokens, that each exist on the bitcoin blockchain and, with the Counterparty software, you use the Counterparty wallet to manage those coins and there's thousands of them that are available and you would use one single program to manage all of those metacoins.
In the case of Counterparty, you would also use that same wallet to send bitcoin, as well. You can send bitcoin just like it's any other one of those other tokens or coins. It's one of the reasons I like the Counterparty project, is it allows you to inter-operate with a world of token and a world of currency that is not just bitcoin. It's a very powerful tool and you see projects like Tokenly, LTB, Let's Talk Bitcoin Network, that have entire business plans around this. And what I think is really nice about the Counterparty approach is that you will inevitably have, there's already one such wallet on your mobile phone that manages all of these currencies, along with bitcoin. And you can imagine a world where, yeah, you receive gift certificates or airline miles or all these things into your bitcoin wallet and you can transact with them.
It's worth noting in the case of Counterparty that you do need to have a Counterparty wallet in order to work with Counterparty assets, so if a bitcoin wallet isn't Counterparty ware, you can't work with a Counterparty asset. However, it's very easy to export the private key of a bitcoin wallet, import that into your Counterparty wallet and immediately gain access to any and all Counterparty activity that was associated with that address. One thing that makes Counterparty very different than, I think, Colored Coins, Open Assets and a few of the other metacoin platforms is that, with Counterparty, you don't have to worry about misspending any of these metacoins, which is unlike Colored Coins and unlike Open Assets. I think Omni also shares that in common with Counterparty. It's important to note that. In the case of Colored Coins and in the case of Open Assets, when you receive a token from somebody, if your wallet isn't Colored Coin aware, you could end up spending that token by way of an incidental bitcoin transaction.
That'll never happen with Counterparty. With Counterparty, you can receive coins through a bitcoin public address and those coins will be kept there until that time at which a private key is exported into a Counterparty ware wallet, at which point, that Counterparty ware wallet will see all the goods and tokens that are on that address and you can then work on it from there. So, yeah, I think that that's the jist of it. It's one of the reasons why I think all coins are probably a waste of time for most people. The notion that we're going to spool up thousands and thousands of wallets on our phone is probably not a sustainable notion. This is tied into the network effect, which is that the community grows around a protocol because there's people growing around the protocol.
It's also the first mover advantage, which is a big part of how blockchains work. So, there ya go, Anzo Connor. I really appreciate the questions. You have some good ones. Hopefully, you found this informative and, if you have more questions, why don't you ask me below? And anybody else who's watching this who likes this video, subscribe to the channel and look around. I'd love to have you here.
Later, party people!