What would this forum be without AnonyMint 
The technical weakness of CounterParty is that Bitcoin can't verify the CounterParty transactions, thus there is no record of the consensus about which CounterParty transactions are valid:
https://counterpartytalk.org/t/questions-about-counterparty-consensus-and-validation/688
http://counterparty.io/docs/faq/#how-do-smart-contracts-form-a-consensus
This presents some technically insoluble problems (they are fundamental and can never be fixed):
1. No one can determine if there was consensus about an external data feed after the fact. Some of the ramifications of this include that if someone hacks the sources of a data feed temporarily, then no one will be able to reach consensus about which set of transactions on the Bitcoin block chain are valid, except by creating a hardfork of the CounterParty chain and writing a new protocol which makes that decision. And this would need to be done every time one of these attacks occurs. So basically CounterParty will be toast if it supports external data feeds and becomes popular enough to be worth attacking. Edit: voting via signatures can substitute for external data feeds, thus this issue may be solvable.
2. Double-spends in the same Bitcoin block can't be differentiated. Thus the only possible action is to ignore both (all) of them. Thus 0-confirmation transactions are absolutely impossible in CounterParty. Thus CounterParty will always be slow (10 min confirmations).
3. Ordering of transactions can't be enforced within a block, thus contracts can not be written which depend on such ordering. I haven't really thought about the impact this has yet. CounterParty doesn't seem to acknowledge this as one of the differences when running Ethereum scripts on CounterParty, so maybe they are not even aware of this flaw.
4. The Bitcoin block chain can't handle the increased scaling load to be a database server.
There are probably many other corner cases and problems. I haven't really thought about it too deeply.
Seems very kludgey and I would avoid it. Non-starter to build smart contracts on the Bitcoin block chain.
The technical weakness of CounterParty is that Bitcoin can't verify the CounterParty transactions, thus there is no record of the consensus about which CounterParty transactions are valid:
https://counterpartytalk.org/t/questions-about-counterparty-consensus-and-validation/688
http://counterparty.io/docs/faq/#how-do-smart-contracts-form-a-consensus
This presents some technically insoluble problems (they are fundamental and can never be fixed):
1. No one can determine if there was consensus about an external data feed after the fact. Some of the ramifications of this include that if someone hacks the sources of a data feed temporarily, then no one will be able to reach consensus about which set of transactions on the Bitcoin block chain are valid, except by creating a hardfork of the CounterParty chain and writing a new protocol which makes that decision. And this would need to be done every time one of these attacks occurs. So basically CounterParty will be toast if it supports external data feeds and becomes popular enough to be worth attacking. Edit: voting via signatures can substitute for external data feeds, thus this issue may be solvable.
2. Double-spends in the same Bitcoin block can't be differentiated. Thus the only possible action is to ignore both (all) of them. Thus 0-confirmation transactions are absolutely impossible in CounterParty. Thus CounterParty will always be slow (10 min confirmations).
3. Ordering of transactions can't be enforced within a block, thus contracts can not be written which depend on such ordering. I haven't really thought about the impact this has yet. CounterParty doesn't seem to acknowledge this as one of the differences when running Ethereum scripts on CounterParty, so maybe they are not even aware of this flaw.
4. The Bitcoin block chain can't handle the increased scaling load to be a database server.
There are probably many other corner cases and problems. I haven't really thought about it too deeply.
Seems very kludgey and I would avoid it. Non-starter to build smart contracts on the Bitcoin block chain.