What will happen when nLockTime is used along with Counterparty transactions I heard that Counterparty cannot handle lock time, but I cannot understand why.

What will happen when we use nLockTime in a transaction which includes Counterparty transactions?
Disclosure: I work for Coinprism.

Counterparty uses the Blockchain for timestamping only. It doesn't use it as a ledger since it builds it's own "parallel" ledger.

As a result most advanced functionality of the Bitcoin ledger can't work on Counterparty:


nLockTime
SPV
Payment Channels and lightning networks (very important for scalability)
Unconfirmed transaction chaining (important for mobile payments and fast transaction processing)


If you want to be able to use all bitcoin features out of the box, you need to look at colored coins.