Can I burn counterparty assets by the underlying bitcoin (proof-of-burn)

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I’m in the processing of writing a whitepaper for a crypto-asset class.

It is deflationary by nature and requires the issuer to be able to perform a proof-of-burn of the asset.

I have not yet decided on an asset platform, but I am interested in using counterparty (the other option would be the open assets protocol).

How might one perform a proof-of-burn using a counter party token? Is it as simple as sending it to the https://blockscan.com/address/1CounterpartyXXXXXXXXXXXXXXXUWLpVr address? After that, can I show the total supply diminished?

I need to be able to easily prove that I burned the token (cannot be spent again)

Thx!

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1CounterpartyXXXXXXXXXXXXXXXUWLpVr is a special address that was used to burn bitcoin and turn it into XCP. You can no longer burn bitcoin at this address. And you cannot use it to burn any counterparty assets.

You can, however, burn counterparty assets by sending them to any other burn address, as long as it is a valid bitcoin address.

1BURNXXXXXXXXXXXXXXXXXXXXXXXTVanmh is an example of a burn address that will work.

See https://github.com/adamkrellenstein/unspendable for a script to generate burn addresses.

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To add to deweller’s answer:

  • You can burn bitcoin at that mainnet address, but nothing will come out (now). It worked during the “bootstrap” or exodus period only. Now it’s a one way street, no XCP gets returned to the sending address.
  • Now XCP are still burned for certain platform services. For example to register an asset (token) on the Counterparty platform you need to “pay” 0.5 XCP and the amount gets destroyed (it doesn’t go to anyone in particular), so since the end of burn period close to 15,000 XCP (there’s close to 30K assets registered) has been burned.
  • On Counterparty testnet, because XCP are always needed for testing, you can use testnet bitcoin to burn for testnet XCP
  • More in FAQ below
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Thanks, very enlightening. Been hearing a lot about counterparty and just starting to look seriously into it.

Is there a method to publicly audit the total supply of assets?

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Cool!
Yes, as explained in the linked article, you can do it via the Counterparty API, but there’s also a user-friendly way via a Counterparty block explorer such as CoinDaddy’s (below ) or blockscan.com.
By the way, alphanumeric asset names (such as A890739216879800249, usually used for “disposable” tokens) can be registered for free, while alphabetic name require 0.5 XCP, so you may see that the actual number of assets is more than the cost of XCPs required to register (because alphanumeric asset names are free).

Another thing you can see at the link above the number of assets right now is 33K, but the number of issuances is > 40K. That’s because you can issue 100 tokens of YOURASSET now and then - if you haven’t locked the asset - you can issue more, e.g. 900 more to increase the float to 1,000. The main use cases are similar to shares or commodity funds, whereby if each token represents a fixed amount of physical goods and you want to increase the capital or accept more investment, you’d want to issue more tokens. Or if you want to raise more capital. Some assets are locked from the outset if that’s the intent of the issuer. The status (locked or unlocked) is recorded on the blockchain. Once locked, an asset cannot be unlocked for additional issuance.

https://counterpartychain.io/

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@JPJA I have seen this come up alot with people looking to have their own burn addresses, may i request you make a simple program on xcp.pw that will allow the creation of a burn address? I think that would add some great value to your already valuable collection of tools there

@deweller pointed out that this script here https://github.com/adamkrellenstein/unspendable can work

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Here’s an online proof-of-burn address generator; http://gobittest.appspot.com/ProofOfBurn .

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