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Why is XCP Needed?

Why is XCP Needed?

Why do we need XCP? Don't we have enough cryptocurrencies already? In this short video, from the heart of the Wynwood district in Miami Florida, I explain the ...

Transcription

What's up, party people? It's Chris DeRose, Community Director of the Counterparty Foundation and right now I'd like to explain to you why is XCP needed. What does it do? What's it there for? Why do we need to define yet another crypto currency? These are all good questions and hopefully we can tackle some of that for you now. So Counterparty's primary crypto currency is really Bitcoin itself. The XCP does often get touted along with the projects, but Bitcoin is burned for all transactions. Bitcoin is the primary function by which most transactions distribute value in the sense that assets on the exchange are typically bought and sold with Bitcoin. Certainly Bitcoin is typically what you would see in a distribution payment on a Counterparty crypto equity and so Bitcoin is really the primary function of Counterparty.

However, XCP is defined by the protocol. There's a handful of things we need to do in Counterparty that can't be done by Bitcoin by itself. At times, XCP is used for the store of value in escrow. Quite simply, Bitcoin can't be held in escrow. You can't put Bitcoin on the network to be distributed per a smart contract in some specific time. So we needed to find some extra store value to do so and XCP works in that sense.

That's less common these days, though, in lieu of perhaps contract execution gas. So for any different given contract in order to prevent the network from being overwhelmed, either in spam or in computational complexity, we need to burn XCP in the same way that cars burn gas in order to perform smart contract execution features. So XCP is very useful in that sense. It is a gasoline, it is energy, it is a commodity for the use of smart contracts. In addition to that, Counterparty's XCP is also used as a spam prevention feature. So if you go to register an asset, a vanity asset, of whatever name you want to use, you need to burn some XCP in order to do so.

And these are things that wouldn't necessarily be supported by the Bitcoin network in full, and that's why we use Counterparty's XCP. Going forward, there are a lot of anticipated uses of XCP. Certainly, any place we can't use Bitcoin we're going to use XCP to perform these features. It'll be probably or certainly used as a representation of stake on the project so or voting features on how the product and how the project will mature and how it will grow will be delegated to owners of XCP proportionate to their XCP holdings. These are just some of the uses of XCP and these are just some of the representations of how it has value in the Counterparty project. And you'll see that that will grow over time and it's certainly grown already in a short time since we've had the project.

So if you have some more questions about XCP or you want to know how we got them in the first place maybe, or where these smart contracts are taking us, certainly ask. Ask me or look at the channel. In fact subscribe to the channel, you may find some cool stuff coming out of this and certainly I can perhaps help you with your understanding of Counterparty going forward. My name is Chris DeRose. You can email me at chris@chrisderose.com, and you can reach me at Twitter on DeRose Tech.

So send in your questions, send in your feedback. Let me know what you think. I'd love to hear from you. Thanks for your time.