[ANN][XCP] Counterparty - Pioneering Peer-to-Peer Finance - Official Thread

[led_lcd]

There appears to be some scam artists among the mastercoin team.

They might be Counterparty investors too.

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[ddink7]

FYI, I've contacted Bitcoin Magazine to let them know about the project. They seem to be interested in looking into it!

Ruben Alexander
4:09 PM (13 minutes ago)

to me
I kinda missed the boat on this and I normally like to be involved early on. I see that your gui will be released on valentines day. Is there an early build (even cli is fine) I can play with?


David [email address redacted]
4:22 PM (0 minutes ago)

to Ruben
Sure! Link included below. FYI I'm just an enthusiast and not "in charge" in any way. Here is a link to the thread on Bitcointalk. The first post is very informative with instructions etc.

Thanks for your response!!

Counterparty is a protocol for the creation and use of decentralised financial instruments using Bitcoin as a transport layer. It has an open-source and MIT-licensed reference implementation, counterpartyd, which is available for download/perusal at https://github.com/PhantomPhreak/counterpartyd/. The protocol specification is hosted athttps://github.com/PhantomPhreak/Counterparty. Pull requests are welcome!

[jl777]

Can @phantomphreak please address the claims made by ethereum founder in bitcoin magazine?

http://bitcoinmagazine.com/9671/ethereum-next-generation-cryptocurrency-decentralized-application-platform/

It seems he thinks among many things that bitcoin is not suitable to be treated as an underlying base  protocol.

One of the main reasons:

Simplified Payment Verification (see the bitcoin whitepaper Section 8 ) becomes not usable. Since the miner will not verify whether a XCP transaction is valid like they do in bitcoin transactions, to check the validity of a XCP transaction, we have to track up to the very beginning (the address sent to burn address). This requires each client to download and keep the whole blockchain.

In Ethereum, they seems to find a way to solve this problem.

Detail can be found in their whitepaper: http://www.ethereum.org/ethereum.html

Personally, I don't think this is something will make Mastercoin/XCP not usable. It just increases the downloading and parsing time.

Would it be possible to have a checkpoint file that is signed by the XCP devs that clients could load instead of the entire blockchain?
For ease of use, this is almost a requirement as few normal people will wait for hours and hours for the initial sync up

It's possible, but it will not be decentralized if there's a checkpoint. People has to trust the one who publish the checkpoint. However, I think it could be very useful to provide some trustworthy services keeping some snapshots, therefore most average users can choose to trust these services and shortcut their parsing and verification. Those trustworthy services cannot cheat others for a long time as long as there're some independent clients choose to verify transactions all by themselves.

Could the network provide feedback on any checkpointed file to make sure it is valid? Presumably there will always be counterpartyd's that parsed the full blockchain, so before any checkpoint file is trusted locally and used, it could make sure it is valid by checking with the overall network.

Assuming it is published on counterparty.co, matches sig, odds are very good it is valid, plus it is only for initial install. So, after quick install, check with network to make sure nobody goofed when uploading the checkpoint file. If it all checks out, then BAM! we saved 17 hours of blockchain sync time without any risk

James

The problem is that even if we use a checkpoint, the size of a checkpoint file for counterparty will be much larger than a checkpoint of BTC. A checkpoint of BTC is just the hash of current block, but a checkpoint of counterparty has to snapshot the balance of each address and the status of each order, bid, broadcast etc.

Confused. Doesnt it take something like 17 hours on initial install now? How long can it take to download 1 gig?

[jl777]

Very interesting. Could be very useful for average users.
Just one question now, how about there's a reorganization after a checkpoint is setup? There has to be a scheme to invalidate the checkpoint in a short time. Maybe associate the checkpoint with the block hash.

Do you mean that you can only "unlock" the checkpoint with the actual latest block hash? Interesting.

Could I suggest a very crude "solution" - the checkpoint doesn't necessarily need to be the very latest snapshot of the Counterparty system. If the checkpoint was always at least even 1 hour old (6-ish blocks ago) the likelihood of a reorganization affecting blocks that far back would be incredibly low.

Also, since the Counterparty Checkpoint DAC runs across multiple machines and a block-chain reorganization is a local client occurrence, the DAC could actually determine when your bitcoind requires a reorganization and postpone the rolling out of the checkpoint.

Even if it is a day old, we avoid 17 hours. 17 hours is a LONG time

[jimhsu]

FYI, I've contacted Bitcoin Magazine to let them know about the project. They seem to be interested in looking into it!

Ruben Alexander
4:09 PM (13 minutes ago)

to me
I kinda missed the boat on this and I normally like to be involved early on. I see that your gui will be released on valentines day. Is there an early build (even cli is fine) I can play with?


David [email address redacted]
4:22 PM (0 minutes ago)

to Ruben
Sure! Link included below. FYI I'm just an enthusiast and not "in charge" in any way. Here is a link to the thread on Bitcointalk. The first post is very informative with instructions etc.

Thanks for your response!!

Counterparty is a protocol for the creation and use of decentralised financial instruments using Bitcoin as a transport layer. It has an open-source and MIT-licensed reference implementation, counterpartyd, which is available for download/perusal at https://github.com/PhantomPhreak/counterpartyd/. The protocol specification is hosted athttps://github.com/PhantomPhreak/Counterparty. Pull requests are welcome!

Great, mention that the (CLI) client is fully functional, blockscan.com (a truly invaluable resource), and forums are available for installation/troubleshooting.

[trilli0n]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though! 

[PhantomPhreak]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

[freedomfighter]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though!  

The assumption seems wrong: this is NOT competing with lighting quick forex and stock trades but rather allows for various p2p scenarios or DA-X financial and trade scenarios . It opens up a whole new decentralized world of not only currency to currency p2p exchange but any form of trade not dependent on speed. in fact, not being ONLY a currency- this opens up further usages and markets that are not possible with JUST a currency.    

As far as the liquidity circle: NOT right- with enough volume the denominations would be 0.0000 etc just like BTC. With REAL 10 or 12 digit annual volume, and just like BTC it doesnt really matter if the starting point is 12M, 40M or 2.6M.

[Vitalik Buterin]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though!  

Blockchain-based technologies in general, whether BTC, MSC, XCP or Ethereum, will not be used for HFT. The scalability is simply not there for that. OpenTransactions servers, on the other hand, are excellent for HFT. Blockchains are for higher-value transactions and settlement.

[jl777]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though!  

Blockchain-based technologies in general, whether BTC, MSC, XCP or Ethereum, will not be used for HFT. The scalability is simply not there for that. OpenTransactions servers, on the other hand, are excellent for HFT. Blockchains are for higher-value transactions and settlement.

There is also some sentiment that maybe the value of all the things being traded at millisecond intervals is actually not changing so fast. The change in prices just being created by all the HFT interacting with each other.

So, a slower pace might not be such a bad idea. Put best bids/asks in and it gets settled every ten minutes (or minute for some blockchains)

James

[jimhsu]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though!  

Blockchain-based technologies in general, whether BTC, MSC, XCP or Ethereum, will not be used for HFT. The scalability is simply not there for that. OpenTransactions servers, on the other hand, are excellent for HFT. Blockchains are for higher-value transactions and settlement.

Thanks for your input Vitalik. Speaking from the Wall Street perspective, not all exchanges out there are even suitable for high frequency trading (witness the recent rise of electronic exchanges - ARCA, BATS, etc). Not all participants are interested in "low-quality" liquidity so to speak, as provided by most high-frequency exchanges (which was one of the indirect causes of the infamous 2010 Flash Crash). Not all assets need to be traded on a real-time basis (real estate [which has many analogies with BTC], bonds, and mutual funds for instance). It's not also widely appreciated that official settlement for stock trades occurs not instantaneously, but 3 days (the T+3 rule). In contrast, 1 hour (6 confirmations) is widely acknowledged to be a reasonable settlement time for even the largest BTC trades.

The blockchain more closely resembles, say, the housing market or the contracts/swaps derivatives markets, which don't operate in any way similar to HFT even though they handle trillions of dollars in notional value. So the notion that non-highly liquid markets can't be valuable is absurd.

[qwertyasdfgh]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

I got the error on the master branch. It still doesn't work for me with the latest github.

[kdrop22]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

I got the error on the master branch. It still doesn't work for me with the latest github.

Yeah, mine does the same as well.

When I do a
"git pull origin master"
I get an update saying 'Already upto date'.
Maybe that is probably why.

[jimhsu]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

I got the error on the master branch. It still doesn't work for me with the latest github.

Yeah, mine does the same as well.

When I do a
"git pull origin master"
I get an update saying 'Already upto date'.
Maybe that is probably why.

Switch to develop or manually apply this fix to cancel.py:

https://forums.counterparty.co/index.php/topic,22.msg163.html#msg163

If not technically inclined, just wait it out a few days.

[Wit22]

Can we get counterparty xcp added to coinmarketcap.com ?

[qwertyasdfgh]

Can we get counterparty xcp added to coinmarketcap.com ?

A couple of people have asked on coinmarketcap's bitcointalk thread. Gliss (the moderator of the thread im guessing) hasn't replied.
https://bitcointalk.org/index.php?topic=199685.1640

[led_lcd]

[...]

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

[...]

I think you have a good point. However, I don't see HFT of cross (virtual) assets as a target utility for Counterparty.

One area which Counterparty targets areas where time scales of 10 minutes is magnitudes less than what is currently available in 'real life': issuance of shares, distribution of dividends and transfer of property. All of this is placed into the blockchain and provable.

I'd be interested to hear how Counterparty compares with traditional markets for betting (and spread betting).

[PhantomPhreak]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

I got the error on the master branch. It still doesn't work for me with the latest github.

Yeah, mine does the same as well.

When I do a
"git pull origin master"
I get an update saying 'Already upto date'.
Maybe that is probably why.

Switch to develop or manually apply this fix to cancel.py:

https://forums.counterparty.co/index.php/topic,22.msg163.html#msg163

If not technically inclined, just wait it out a few days.

Actually, I just pushed the hotfix to master.

[qwertyasdfgh]

Watch out: there's a fatal bug in develop triggered in block 284193 with the error message: 'assert asset != 'BTC' # Never BTC.'. I just pushed a hotfix to GitHub.

I got the error on the master branch. It still doesn't work for me with the latest github.

Yeah, mine does the same as well.

When I do a
"git pull origin master"
I get an update saying 'Already upto date'.
Maybe that is probably why.

Switch to develop or manually apply this fix to cancel.py:

https://forums.counterparty.co/index.php/topic,22.msg163.html#msg163

If not technically inclined, just wait it out a few days.

Actually, I just pushed the hotfix to master.

Thank you!

[canth]

This is an interesting concept but I don't expect widespread adoption of XCP.

First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.

Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.

I hope I'm proven wrong though!  

Blockchain-based technologies in general, whether BTC, MSC, XCP or Ethereum, will not be used for HFT. The scalability is simply not there for that. OpenTransactions servers, on the other hand, are excellent for HFT. Blockchains are for higher-value transactions and settlement.

Thanks for your input Vitalik. Speaking from the Wall Street perspective, not all exchanges out there are even suitable for high frequency trading (witness the recent rise of electronic exchanges - ARCA, BATS, etc). Not all participants are interested in "low-quality" liquidity so to speak, as provided by most high-frequency exchanges (which was one of the indirect causes of the infamous 2010 Flash Crash). Not all assets need to be traded on a real-time basis (real estate [which has many analogies with BTC], bonds, and mutual funds for instance). It's not also widely appreciated that official settlement for stock trades occurs not instantaneously, but 3 days (the T+3 rule). In contrast, 1 hour (6 confirmations) is widely acknowledged to be a reasonable settlement time for even the largest BTC trades.

The blockchain more closely resembles, say, the housing market or the contracts/swaps derivatives markets, which don't operate in any way similar to HFT even though they handle trillions of dollars in notional value. So the notion that non-highly liquid markets can't be valuable is absurd.

Good points, Vitalik & jimhsu. I agree with both of your points - here's something to add to the idea that valuable markets aren't 100% centered around HFT.

Everyone remembers Lehman Brothers for their spectacular collapse in 2008. Surprisingly, they are still in business today 5+ years after declaring bankruptcy, albeit in an odd fashion. Their derivatives and real estate contracts are so complicated that it's going to take until sometime in 2017 to unwind them all and reclaim funds for creditors.

There are tons of markets where the value of the contracts are significant enough that phone trading is still the primary way that business is done - tapping into that with blockchain based distributed systems would be a tremendous feat, imo.

Old but interesting article and still essentially valid through 2017: http://www.businessweek.com/articles/2012-09-21/welcome-to-lehman-brothers-dot-were-open-for-business