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Counterparty Wants to Stay on Bitcoin but Fees Remain a Contentious Issue

The Counterparty Foundation has said informally it will keep the Counterparty asset creation layer running on the Bitcoin blockchain. However, there remains an active push for a more formal vote on whether to fork the project to a new blockchain to escape Bitcoin’s current high-fee conditions.

Also read: Bitcoin and Crypto’s Crazy Year: 2017 Brought Tokens, Forks – and Piles of Money

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‘Only the Dankest Pepes Can Now Be Traded’

Assets and tokens created on Counterparty use the Bitcoin blockchain for transactions. For the most part, they’re game items, appcoins and other collectables. The most well-known Counterparty projects at the moment are the “Spells of Genesis” trading cards, and “Rare Pepe” assets — collectable art pieces featuring the internet’s favorite frog troll.

Though some Rare Pepes are worth thousands of dollars, Counterparty on the whole relies on smaller transactions. These have become prohibitively expensive to perform directly on the Bitcoin blockchain as network congestion pushes per-transaction fees to an average $44 USD (at press time).

One of the Counterparty Foundation‘s community directors Shawn Leary posted a piece on the official discussion forum this week titled “To fork or not to fork, this is the question”.

“I am starting this thread to squelch a burgeoning moan from some and to bring transparency for others,” he wrote.

Counterparty needs on-chain scaling and lower fees to work as originally intended, and some had suggested shifting the entire project to something like Litecoin.

“We do need lower fees in order for the DEx (Decentralized Exchange) to work well for something like the Rare Pepe craze. Only the dankest pepes can now be traded at this time, or perhaps only bulk deals of cheaper rares. But should this powerful protocol follow the needs of cheap, albeit fun and addicting, assets?”

That said, Leary added, many came to Counterparty because it is Bitcoin, so the project anywhere else would be a different project by nature even if successful. It “feeds our (bitcoin) maximalist appetite,” he said.

In response, three other Foundation members agreed Counterparty should stick with Bitcoin, and avoid using any of the project’s funds on attempts to move it. There were no arguments in favor of a fork away — at least in this thread.

Counterparty’s native currency, XCP, got its value from a 2,000 BTC “burn” in January 2014 — token buyers “burned” bitcoins by sending them to an unusable address, creating 2.6 million XCP to fuel the network. Therefore, any attempt to move the chain completely would require a repeat of this, no matter what the ultimate benefit.

Counterparty Should Look at Other Options

That’s not to say there is a consensus, though. Bitsonline spoke to Foundation member Trevor Altpeter about the opposing view and other options.

“I think LTC and BCH are both viable paths. Litecoin would be my personal suggestion. This is just a practical consideration,” he said, adding that he supports Bitcoin Core and the development direction it’s taking with Bitcoin.

However the issue remained contentious within the Counterparty community and — like Bitcoin itself — “waves of members” have likely left over the issue, Altpeter said.

It was around a year ago that members first began expressing concerns that high fees could cripple Counterparty, he continued. The issue became contentious around Spring 2017.

Now, there’s a more formal push for a fork — which is the issue Shawn Leary was trying to nip in the bud. Altpeter continued:

“Earlier in 2017, when the Counterparty community was still largely intact, I created two proposals that would have

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