What is/was the Counterparty burn?
How were Counterparty's XCP Created? What is it to 'burn' Bitcoin? In this video, from the heart of the Wynwood district in Miami Florida, I explain the answers to ...
Hello party people, it's Chris DeRose here in the Wynwood district of Miami, and I am the community director of the Counterparty foundation. And today I wanted to ask the question, what is XTP and how is it different than other cryptocurrencies? So let's begin. XTP was created in the early part of 2014, between the early part of January and the early part of February. It was created during the "burn." It is not a mine resource, and in that way off the bat it's very different from other cryptocurrencies. Whereas other cryptocurrencies have a block chain of their own that they need to sustain, Couterparty has such no encumbrance.
It uses the block chain from the Bitcoin protocol. As such, the fixed supply of XTP will remain fixed, and will actually even diminish over time, whereas other cryptocurrencies typically increase over time, and though perhaps the rates of creation are lower, they're still inflationary at some level. That is not true for Counterparty's XTP. Counterparty's XTP is useful for many things on the Counterparty network. It is itself not an incentive for transactions to be included because we're using Bitcoin for that feature, but it is a gas for executing smart contracts. It is burned during the creation of assets.
It is an anti-spam feature, amongst other things. It is a testament of state for various voting functions which will be incorporated in the Counterparty protocol over time. It's important to note that though there's a fixed number of Counterparty and though it is in fact burned, all of these functions which require burning are relative to the size of the money supply. So for people who are fearing that we'll run out of Counterparty XTP in the future, fear not. The rates at which we'll consume it will be continually diminished over time. And they are divisible to a significant degree so it will not be a problem for us any time soon.
Unlike other projects, managing the money supply is a significantly easier project in Counterparty because we don't have to worry about the incentives of the miners, we don't have to worry about the strength of the block chain or the value of these tokens outside the system because Bitcoin provides all of those features for Counterparty. Counterparty's XTP are awarded to Bitcoin addresses, and Bitcoin holders have those XTP. There aren't separate addresses or separate identities or anything of that sort, in the Counterparty network. Unlike, again, other protocols, Counterparty is itself just a staple portion of the Bitcoin network, it's an extension of Bitcoin, so we don't have to worry about all the extra things that come with managing the money supply like you see in these other cryptocurrencies. So that's the basics of Counterparty XTP. If you have more questions, if you want to see your own question answered, don't hesitate to ask us.
You can email firstname.lastname@example.org, or you can tweet @DeRoseTech on twitter. So I look forward to hearing from you guys, subscribe to my channel, and watch more videos.