Counterparty is a peer-to-peer financial platform and open-source protocol built atop the Bitcoin blockchain. It extends Bitcoin's functionality by embedding additional data into Bitcoin transactions, enabling features not natively supported by Bitcoin. These features include the creation and trading of custom digital assets, execution of smart contracts, and the development of decentralised applications (DApps).

The native token of the Counterparty platform is XCP. XCP is utilised in scenarios where Bitcoin cannot serve as the working currency within the protocol, such as denominating units or paying network fees.

Counterparty enables users to create and trade custom digital assets on the Bitcoin blockchain, leveraging Bitcoin's security and decentralisation. This allows for the tokenisation of various assets, including art and real estate. Additionally, Counterparty supports the automation of complex financial agreements through smart contracts, facilitating efficient and secure management of such agreements on the blockchain. The platform also provides infrastructure for building decentralised applications (DApps) on the Bitcoin blockchain, supporting use cases ranging from gaming to finance.

The XCP token is integral to the Counterparty protocol, used in situations where Bitcoin cannot function as the working currency, such as paying network fees or serving as a denominational unit.