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Title: Colored Coins Question Post by: Picard78 on August 22, 2020, 06:31:10 AM In the below YouTube video Andreas Antonopoulos states that Colored Coins can be implemented using OP_RETURN. I don't understand how OP_RETURN can create a transferable colored Coin since OP_RETURN is not spendable after its creation.
https://www.youtube.com/watch?v=r2FaaLS9vqE&t=309s (https://www.youtube.com/watch?v=r2FaaLS9vqE&t=309s) He mentions OP_RETURN at the 3:38 minute mark. From my understanding, OP_RETURN is simply used to permanently embed data in the BlockChain but ownership of this Output can never be transferred so how can OP_RETURN enable the creation of Colored coins? Thank you Title: Re: Colored Coins Question Post by: ranochigo on August 22, 2020, 06:48:28 AM ColoredCoins doesn't exist at a Bitcoin protocol level. OP_Return allows for an embedded message which doesn't bloat the UTXO while still being able to store message on the Bitcoin blockchain.
Any implementations will have to run on top of Bitcoin and use the OP_Return as a verifiable and transparent way to store messages. The layer would have to be able to create and understand their own OP_Return message structure. An example is OmniLayer. Title: Re: Colored Coins Question Post by: Picard78 on August 22, 2020, 07:00:16 AM So the transfer of ownership of the Colored Coin (data in the OP_RETURN) is managed above the Bitcoin BlockChain. Hence, all the OP_RETURN provides is the creation of an immutable "item" denoted by the data after the OP_RETURN.
Title: Re: Colored Coins Question Post by: ranochigo on August 22, 2020, 07:05:19 AM So the transfer of ownership of the Colored Coin (data in the OP_RETURN) is managed above the Bitcoin BlockChain. Hence, all the OP_RETURN provides is the creation of an immutable "item" denoted by the data after the OP_RETURN. It's generally true for quite a few different implementations that relies on the Bitcoin Blockchain directly.Take a look at OpenAssets[1]. Different implementations will have a unique suffix for their own clients to differentiate between which OP_Return transactions are relevant to them. [1] https://github.com/OpenAssets/open-assets-protocol/blob/master/specification.mediawiki#Open_Assets_Transactions Title: Re: Colored Coins Question Post by: Picard78 on August 22, 2020, 07:17:36 AM Tether is issued on the Omni Layer. I didn't realize this is another major use case for the Bitcoin Blockchain. I wonder what % of the total Bitcoin BlockChain transaction data is utilized for applications other than traditional UTXO transfers.
Title: Re: Colored Coins Question Post by: pooya87 on August 22, 2020, 07:53:34 AM I wonder what % of the total Bitcoin BlockChain transaction data is utilized for applications other than traditional UTXO transfers. it differs from time to time. for example during 2017 there were a couple of altcoins that were building their blockchain by basically spamming bitcoin blockchain with transactions like this (https://blockchair.com/bitcoin/transaction/1148de03991e0bf17e2846e7eb9373f7ae280ca07349f637052a6874c5b2eb5c) (note that it doesn't use OP_Return). but most of them end up dying over the long run or change their methods. everything (including tether) is also used a lot more during the long and big bull runs like 2017 compared to other times. Title: Re: Colored Coins Question Post by: Wind_FURY on August 25, 2020, 07:13:31 AM I wonder what % of the total Bitcoin BlockChain transaction data is utilized for applications other than traditional UTXO transfers. it differs from time to time. for example during 2017 there were a couple of altcoins that were building their blockchain by basically spamming bitcoin blockchain with transactions like this (https://blockchair.com/bitcoin/transaction/1148de03991e0bf17e2846e7eb9373f7ae280ca07349f637052a6874c5b2eb5c) (note that it doesn't use OP_Return). but most of them end up dying over the long run or change their methods. everything (including tether) is also used a lot more during the long and big bull runs like 2017 compared to other times. Not anymore in the coming bull runs, with the development of the Liquid side-chain in my opinion. I believe the Tether.to CTO also said that they will use the Lightning Network as a platform for USDT issuance. Title: Re: Colored Coins Question Post by: pooya87 on August 25, 2020, 07:21:31 AM ~ Not anymore in the coming bull runs, with the development of the Liquid side-chain in my opinion. I believe the Tether.to CTO also said that they will use the Lightning Network as a platform for USDT issuance. Lightning Network and Liquid are two very different networks though. while i have not seen any traces of centralization in LN so far i have seen some red flags indicating centralization in Liquid. as for Tether, i believe they will start an LN network eventually like some other altcoins but it still has to be settled on bitcoin blockchain since unlike those coins USDT doesn't have its own separate blockchain or network. Title: Re: Colored Coins Question Post by: Wind_FURY on August 26, 2020, 08:16:07 AM ~ Not anymore in the coming bull runs, with the development of the Liquid side-chain in my opinion. I believe the Tether.to CTO also said that they will use the Lightning Network as a platform for USDT issuance. Lightning Network and Liquid are two very different networks though. while i have not seen any traces of centralization in LN so far i have seen some red flags indicating centralization in Liquid. as for Tether, i believe they will start an LN network eventually like some other altcoins but it still has to be settled on bitcoin blockchain since unlike those coins USDT doesn't have its own separate blockchain or network. I wouldn't call them "red flags" in Liquid, they are trade-offs. Plus token issuance is always centralized, which USDT issuance is something like, in ANY network its developers are choosing. You trust that the issuer will not scam you. |