The Counterparty Foundation, the non-profit organization that has developed and which oversees the Counterparty protocol and ecosystem, has announced the Ethereum Virtual Machine (EVM) port which will provide users with the ability to develop and deploy Ethereum-style smart contracts on the Bitcoin blockchain.
The EVM, set to be implemented within a month following additional testing, will allow users to create and deploy smart contracts on the Bitcoin blockchain for use in a number of applications such as decentralized autonomous organizations (DAOs), programmatic escrow services, identity systems, social networks, consensus building tools for voting, among others.
Counterparty is a free and open source platform and protocol for creating peer-to-peer financial applications on the Bitcoin blockchain. Notable assets and issuers using Counterparty’s tech include Let’s Talk Bitcoin’s LTBCOIN, GetGems‘ GEMZ, Storj‘s SJCX, among others.
In a media release, Counterparty‘s core developer Ruben de Vries said that the initiative is aimed at “pushing Bitcoin functionality forward by porting innovative features from the Ethereum project to the Bitcoin blockchain.”
Trevor Altpeter, one of the Counterparty Foundation directors, told CoinJournal that users will have access to all features of Ethereum, noting that the only differences are Bitcoin specific such as longer block times and thus, greater security.
“Put simply, you hold Bitcoin, Counterparty (XCP) and Counterparty assets in the same Bitcoin address,” Altpeter said. “This means they all can share one private key making key management and security much easier.”
Running smart contracts on the Bitcoin blockchain has many advantages considering that it is dominant cryptocurrency in the space.
“Most of the uses for smart contracts rely on the ability to escrow value directly,” Altpeter said. “Since Bitcoin is the most valuable blockchain it is the only blockchain that currently accommodates this niche. Ethereum will have to become significantly more valuable before it would be realistic to build uses that involve escrowing value.”
When Ethereum launched in mid-2015, it triggered a craze for smart contracts, dapps and DAOs. Since then, a number of platforms have emerged in response to the trend.
Today, notable projects include Lisk, a platform launched earlier this year that allows for the development and deployment of dapps and sidechains, and The DAO, a decentralized autonomous organization that aims at acting as a venture capital fund for early stage Ethereum projects.
The DAO has gained much attention during the past weeks as it successfully raised over US$170 million worth of ether (12.02 million), making it the largest crowdfunded project in history.
When asked about his opinion of the smart contract craze, Altpeter said:
“My opinion, and largely the opinion of those involved in Counterparty, is that there is an excessive amount of hype surrounding these [DAOs, dapps and smart contracts] projects. We expect that it will take some time, just like the trajectory of Bitcoin, before you see smart contracts being utilized to their full potential. […]
“The reason it will take time for smart contracts to be fully utilized goes back to how most of these smart contracts must escrow value. As a result, their usefulness is directly tied to the valuation of Bitcoin and Ethereum. If these cryptocurrencies continue to grow in value you will see smart contract uses grow in tandem.”