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What Is Counterparty?

Counterparty (XCP) is a protocol layer built on top of the Bitcoin blockchain that enables the creation and trading of custom tokens, digital assets, and smart contracts. Launched in January 2014 by Robert Dermody, Adam Krellenstein, and Evan Wagner, Counterparty was one of the earliest token platforms in cryptocurrency, predating Ethereum by over a year. All Counterparty transactions are embedded within Bitcoin transactions, meaning the protocol inherits Bitcoin's security and decentralization without requiring its own separate blockchain.

The XCP token was created through a unique "proof of burn" mechanism where participants sent Bitcoin to an unspendable address, permanently destroying those BTC in exchange for newly created XCP. This distribution method ensured there was no premine, ICO, or developer allocation. XCP is required for certain advanced Counterparty features such as creating named tokens and executing smart contracts, while basic unnamed token creation can be done with just Bitcoin transaction fees.

Counterparty has a rich history in the digital asset space. It was the platform behind some of the earliest crypto collectibles, including Rare Pepe cards (2016), Spells of Genesis game assets (2015), and various other early NFT-like tokens that predated the mainstream NFT boom by several years. The Counterparty decentralized exchange (DEX) was also one of the first on-chain trading mechanisms, allowing users to trade tokens directly on the Bitcoin blockchain.

Counterparty drew renewed attention during the Bitcoin cultural revival of 2023 and 2024, which was driven by Ordinals, BRC-20 tokens, and Bitcoin Stamps. The Stamps protocol, which embeds image data directly into Bitcoin transactions using Counterparty's technology, brought new users and developers to the platform and helped fund a substantial rewrite of the reference software. That wave has since cooled considerably, and XCP is now very thinly traded, though the protocol itself remains maintained.

Getting Started With Counterparty

  1. Step 1: Learn About Counterparty. Visit counterparty.io to understand how the protocol works on top of Bitcoin, including token creation, the DEX, and the history of digital assets on the platform.
  2. Step 2: Set Up a Wallet. Use a Counterparty-compatible wallet to create an address. Since Counterparty operates on Bitcoin, your Counterparty address is a Bitcoin address that can hold both BTC and Counterparty tokens.
  3. Step 3: Fund Your Wallet. Send Bitcoin to your Counterparty wallet address. You need BTC for transaction fees since all Counterparty operations are Bitcoin transactions. You may also want to acquire XCP for advanced features.
  4. Step 4: Explore the Ecosystem. Browse existing Counterparty assets, explore the on-chain DEX, or create your own tokens. The platform's connection to Bitcoin's history and culture provides a unique ecosystem of digital collectibles and assets.

How to Get a Counterparty Wallet?

Freewallet (Counterparty)

Freewallet is a popular open-source Counterparty wallet available as a desktop application. It provides full access to Counterparty features including token creation, DEX trading, dispensers, and asset management. Note: This is the Counterparty-specific Freewallet, not the unrelated mobile app of the same name.

Rare Pepe Wallet

Originally created for trading Rare Pepe cards, this web wallet supports all Counterparty tokens and provides access to the Counterparty DEX. It offers a user-friendly interface for managing Counterparty assets.

Counterparty CLI

For advanced users, the Counterparty command-line interface provides full protocol access. Running your own Counterparty server gives you complete control and the ability to interact with all protocol features programmatically.

Counterparty Resources

How to Buy Counterparty?

XCP can be purchased on the Counterparty decentralized exchange directly on the Bitcoin blockchain. This is the most native way to acquire XCP, trading Bitcoin for XCP in a fully on-chain transaction.

XCP may also be available on select centralized exchanges, though liquidity can be limited. Dispensers on the Counterparty network provide another peer-to-peer method for acquiring XCP and other Counterparty tokens by sending BTC to a dispenser address.

Latest Counterparty News

The most significant recent work on the protocol was Counterparty 2.0, a ground-up rewrite of the reference implementation. In September 2024, the developers released Counterparty Core v10.4.0, described by the project as a major release with numerous protocol upgrades, which introduced UTXO support and a Fair Minting Protocol. Explorers now identify the live network as "Counterparty 2.0 (Mainnet)."

The transition was not entirely smooth. On October 17, 2024, the project published a post-mortem on a partial network outage in which a non-consensus bug triggered at the activation block of the protocol change caused many nodes to slow to a halt. A hotfix was released to resolve it.

Trading activity has fallen sharply since the Ordinals and Stamps peak. As of July 2026, CoinGecko ranks XCP around #1,748 by market capitalization, with a market cap near $3.2 million against a circulating supply of roughly 2.59 million XCP, and 24-hour trading volume that is frequently under $100. The protocol is not abandoned: the official site, documentation, and block explorer are all live, and historical Counterparty assets such as Rare Pepe cards retain interest as artifacts of Bitcoin's cultural history. But anyone considering XCP should expect extremely limited liquidity.