For quite some time now, developers and digital currency enthusiasts have been looking for a way to run smart contract technology on top of the Bitcoin blockchain. Although this service is provided by BitHalo already – and soon by Rootstock as well – Counterparty was among the first to port Ethereum smart contract platform to Bitcoin back in 2014. After perfecting this functionality on the Counterparty testnet for quite some time, the team will be launching this Ethereum Virtual Machine to the mainnet today.
Counterparty Explores Ethereum Virtual Machine on Testnet
To get people more excited about this announcement, it is time to take a look at what Counterparty has been trying to accomplish over the past 15 months. Keeping in mind how Counterparty was designed to extend the Bitcoin protocol by focusing on peer-to-peer finance on the blockchain, it only makes sense the team focuses their attention on Ethereum smart contracts as well.
However, there was a glass ceiling for this functionality, as the smart contracts had to be hard-coded into the protocol reference client, which is the same limitation Bitcoin has been facing for this technology since day one. Writing smart contracts which can be executed whenever wanted or needed is the ultimate goal, but until the Ethereum Virtual Machine came along, that was almost impossible to achieve.
On the technical side of Ethereum, there is a significant focus on automating smart contracts, which remove the need for human interaction to verify the outcome of agreements. No hard coding is necessary, as there is a virtual machine at the disposal of users to create new contracts. Having that type of functionality in the Bitcoin ecosystem would be a significant step forward to make the leading digital currency more legitimate.
In November of 2014, Counterparty Contracts was launched, which let users write Turing Complete smart contracts into the Bitcoin blockchain, with the code being executed on every Counterparty node. This initiative – a port of the Ethereum Virtual machine system and modified to use the Bitcoin blockchain – was open sourced on GitHub and available for public testing on the Counterparty testnet for over a year.
One of the biggest challenges was making sure Counterparty was compatible with the Ethereum contract language, although the team managed to pass that test with flying colors. Some minor incompatibilities were identified, but after months of hard work, everything has been ironed out.
Mainnet Deployment Is Big News For Bitcoin
Now that Counterparty is ready to launch their smart contract solution for Bitcoin on the mainnet, things will get absorbing for all parties involved. Bitcoin will gain additional practical use case value, as individuals and companies will be able to create automated smart contracts without resorting to an alternative digital currency or blockchain. XCP will get a lot of positive attention too, as they become the world’s first fully-distributed platform for smart contracts.
All in all, smart contracts are a significant development for the digital currency ecosystem in general, as it shows the world why this technology and these protocols are so valuable. Counterparty Contracts will go a long way in this regard, as it is an open platform approachable by anyone in the world, regardless of technical expertise. Quick and convenient deployment of smart contracts on the Bitcoin blockchain is a significant step forward to make Bitcoin more legitimate in the eyes of businesses and consumers.
Source: News tip via email
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