Colored Coins is an open source protocol which enables issuing smart assets on top of the Bitcoin Blockchain. Currently, there are 3 leading implementation in the Colored Coins community (Chormaway, Coinprism and Coinspark). We were inspired by those 3 that certainly laid the foundation for Colored Coins. We have decided there was a room for a more comprehensive and robust implementation, that combines existing ideas but also solves long term problems that may occur.
We are about to release in the next couple of weeks a new implementation for Colored Coins, developed by Colu. ColoredCoins.org will still support all the different implementations and will strive towards interoperability.
We have decided to break down the development process into 2 main layers:
This coloring layer is leveraging different features from different protocol implementations. It contains the coloring scheme that defines how the OP_RETURN field will be handled when writing the transactions on the Blockchain.
This layer is defining the capabilities of the assets that are built on top of it, and as such it has generated some debate in the Colored Coins and Bitcoin 2.0 community. A good coloring scheme is essential, since it will handle the way we are transferring and securing assets on the Blockchain, and will provide a solid foundation for the future of Colored Coins. We welcome any discussion around its functionality.
This layer is handling the metadata attached to each transaction. It can contain more than just information, but also rules for smart assets, and dramatically extends the capabilities of the coloring layer.
Except of defining the set of rules for smart assets, the Rule Engine also handles how those rules are publicly stored. Up to now, smart assets that were built on the Bitcoin Blockchain, used other Blockchains to hold the metadata or stored it in a centralized DB.
We are proposing a new way of storing the information – using torrent technology.
Colored Coins new Rule Engine will automatically store the metadata in torrents, where they can be freely accessed and verified. We chose to use this technology because it was important for us to store the metadata in a decentralized manner and attach each piece of information to a transaction on the Bitcoin Blockchain. We hope that this model for storing asset metadata will be a benchmark for future Bitcoin 2.0 projects.
More about this functionality will be released in the detailed spec.
The following components will be released at ColoredCoins.org:
– Specifications for the new ColoredCoins protocol
– Block Explorer
– Field tested code with API that will allow issuing assets on the blockchain.
A final draft will be published as soon as we receive all the community references.