Re: [ANN][XCP] Counterparty - Pioneering Peer-to-Peer Finance - Official Thread
The value of XCP derives from three things: 1) its mandatory usage in other functionality (such as all derivatives) and 2) its superiority to BTC with trading and crowdsales (it's much faster) and 3) it represents stake in the protocol (for future protocol changes, etc.).
Thanks, but I have more questions
. What does representing a stake in the protocol mean? And is there a link or something about derivatives for me to read up on?Bitcoin itself is a technology, a protocol, the BTC token essentially is a stake (share) in that protocol. Just like owning shares in Apple allows you to bank on the success of apple, owning a BTC 'share' of bitcoin allows you to bank on the success of Bitcoin.
You have 21 million BTC that will ever be distributed via the minting/mining process, so owning 1 BTC gives you a 1/21,000,000 stake. Your proportional stake will be inflated gradually until sometime roughly near 2140 when emission ends.
CounterParty is also a protocol - XCP is the underlying token that gives you a share in the protocol. there are a fixed number of roughly 2.6 million XCP that had already been 'minted' via the Initial proof-of-burn, therefore owning 1 XCP gives you a stake of 1/2,649,791 that will never be inflated. (In fact- the opposite is true as XCP will be destroyed during things like asset issuance- and just from a cursory check seems to be about 8615 XCP destroyed already)
You can find more info on derivatives here and here