Counterparty is to launch Ethereum’s Virtual Machine on testnet in two weeks, with a mainnet launch estimated around Autumn 2016, bringing Ethereum’s smart contract functionality to Bitcoin.
Counterparty’s EVM is 99% the same as Ethereum’s, according to sources, and has 85% test coverage, higher than Ethereum’s python core library, Pyethereum, according to a press release.
Response to the DAO hack
Responding to the recent DAO debacle, the press-release emphasises that Counterparty’s work on an EVM port continues as planned, but a new bylaw has been implemented.
The press-release says:
“[F]orbids the Counterparty development team from publishing code to fork and/or roll-back the network as a response to bugs in specific smart contracts. (Where the fault is due to a bug in the underlying EVM -- and not any specific smart contract that runs on it -- the development team will of course write and publish bug fixes.)”
It further adds a new kill switch whereby a yet to be determined number of Counterparty holders can “initiate a rapid shutdown of the EVM subsystem while the rest of the Counterparty network continues to function perfectly.”
Made possible due to Counterparty’s core features of “asset creation, transfer and decentralized trading” being “completely independent of any smart contract functionality.”
Utilizing Bitcoin’s Blockchain
Counterparty was created by burning 2,125.63 Bitcoins, worth around $1.8 million at the time, in January 2014. It offers the ability to create assets by utilising Bitcoin’s Blockchain through embedding data in on-chain bitcoin transactions.
It now aims to provide much more complex and Turing complete functionality by incorporating Ethereum’s Virtual Machine, bringing smart contracts to Bitcoin.
The new smart contract functionality faces much competition, including within bitcoin. Rootstock, which is yet to be launched, provides the same functionality, but unlike Counterparty, it uses a sidechain, a very new technology with its own security parameters and trade-offs.
In turn, by using Bitcoin’s Blockchain, Counterparty is affected by protocol level Bitcoin qualities, such as roughly a 10-minute wait time for one confirmation, and, more recently, transaction backlogs during high usage leading to higher fees and, for some, lengthy waiting times.
An option to fully shut down all smart contracts
Against Ethereum, Counterparty’s main benefit may be the “no-rollback” clause which binds developers to not offer Counterparty holders the option to provide a human fail-safe mechanism in the event of potentially catastrophic losses caused by a bug in a smart contract.
However, that is balanced by Counterparty giving holders the option to fully shut down the entire EVM system and all smart contracts. A potentially drastic option with wide ramifications for Counterparty smart contract users and developers.
Nonetheless, Counterparty’s EVM gives the digital currency ecosystem more choice, with smart contract developers and users able to decide whether they wish to use Ethereum’s EVM which gives Ethereum’s ecosystem the ability to take action in the event of catastrophic losses that threaten the entire network, Counterparty’s EVM which benefits from the security of bitcoin’s blockchain and gives holders the option of shutting down the whole EVM system or, the eventually to be launched, Rootstock which uses sidechains.
The above are joined by many other forks of Ethereum, creating a vibrant smart contracts ecosystem and a mini-race of its own as parties vie to position themselves for mainstream adoption, especially now that Blockchain tech has been fully acknowledged with everyone, from giant banks to giant tech companies and start-ups racing to bring this new technology to the masses.
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