Bitcoin Forum

I have an idea for a new alternative blockchain that uses a two-dimensional value instead of one-dimensional value.

The idea is similar to the existing colored coins idea.

Each output has two values:
1.) the normal currency value
2.) additionally an identifier or "color" (an address) of the person who "issued" them.

Newly mined coins always have an identifier of #0 (this is the default).

Any person can create a new issue (a "color") of coins stored in one of his adresses. Once "colored" any outputs originating from this address keep the identifier of this original address.

The key point is that transactions of different colors do not mix. They are always maintained separately. The client would show a balance for each different color.

It should be possible to "decolor" coins (send to address with identifier of #0).
It should also be possible to increase the coins of an existing color by sending coins to the original issuing address (but only if the receiving address also signs the transaction). Alternatively, there could be a switch that is set when a color is issued that determines whether new coins can be added later or not. So you would have the option of creating a fixed amount or having a variable amount of a color.


Use:
People could use this blockchain to issue their own currency or stock/shares for a project. This way you would have a distributed, trust-free way of keeping track of shareholders. People could easily transfer their shares to other people. The only risk is with the issuer, you don't have a third party risk.

All other parameters of this blockchain could be same as in Bitcoin, unless people have some good suggestions. Maybe a higher total of coins? Maybe the mining algorithm should be something other than SHA-256 just so that existing ASIC owners could not grab all the coins?

What do you think of this?

I like the idea of colored coins, some remarks:

1. If you can decolor (or "wash") a coin, it would mean that anyone could simply destroy shared of your project (or whatever it is that the color represents). I don't think this is a good idea. If washing is to be allowed, it should only be allowed by the owner of the color.

2. In order to issue "shares", I would have to do one of two things:
a) Color the coins people use to by shared and send them back to the buyer.
b) Collect a bunch of coins before issueing shares so I can send those out to share buyers.

In both cases, how do I actually fund the project?

I don't think it's bad if a coin is washed because that would simply increase the proportion of the remaing holders of that color.
If it's too hard to wash a coin then there could be loads of "unusable" coins from projects that have been finished. Coins need to be recycled since there are a limited number of coins but potentially an unlimited number of possible projects.



That is up to the project. The issuer could trade something in exchange for sending the shares (colored coins), like in an IPO.

Are you aware of colored coin project? (See my signature.)

It is certainly desired to have a blockchain which supports colored coins natively (which means that coloring will be checked by miners, so SPV is possible), but we don't yet have resources to do that, so we focus on colored Bitcoins.

I think colored Bitcoins is the good way to test the idea. Essentially the only difference between native and non-native support is performance cost of SPV, and before we have lots of transaction with colored coins difference is non-essential.