I wrote my comment before the btc-tc news came out. I believe after this people would have more interest in this project.
Well, I hope so... A year ago there was a lot of interest after GLBSE collapsed, but very few developers contributed to the effort.
I have tried to read some of the material but I guess I have some trouble understanding the status and support level for this project.
We have multiple software projects, and all of them are not quite ready for the mainnet for various reasons.
Also, there is no specification, but design was discussed on the mailing list, and once we finally decide on what to implement in software, it won't be a problem to compile it all into a specification.
1. What do you mean "our software is too slow", which software are you referring to and what do you mean by too slow? How will this be addressed?
We need to scan the blockchain for transactions involving colored coins, and blockchain is large, so scan takes a lot of time. There are many ways to optimize it, but we didn't implement them yet because of a lack of manpower. Reasons are different for each software project:
1. ArmoryX was slow to initialize, simply because it is Armory. New version of Armory uses a different design, so maybe it would be faster. But it takes several hours to initialize Armory for the first time.
2. WebcoinX is slow because it does backward scan and fetches transactions one by one. There are many ways to optimize the process (particularly, we're going to change coloring scheme to help this), we just haven't had a chance to implement it. But then it scales poorly with a number of colored transactions, we'll have to employ advanced cryptography to make it fast.
3. NGCCC/coloredcoinlib is slow because it scans blockchain via bitcoind's JSON-RPC API, one transaction at time. It will be faster if we grab whole blocks (probably), also use of an external service can drastically speed up the initial scan.
2. Are there known issues that would result in compromised integrity of an issue of colored coin (I think you call it color leakage or dilution in one of the papers)?
Well, a bug in colored coin wallet software can result in destruction of colored coin.
Same is true for any cryptocurrency software. You know, there are several documented cases where software didn't include change output, and so a large amount was sent as a fee... IIRC it was 200 BTC in one recent case. I.e. somebody lost $20000 worth of Bitcoins just because someone forgot to add one line of code to a script. (Miner returned money in that case.)
Of course, being aware of this problems, we should design our software to prevent them, and add extra checks to prevent problems before shit hits the fan.
Also, we have improved the theoretic model we are using and approach to wallet implementation in May-June, so many of old concerns are no longer relevant.
3. Are there issues with the way the accounting for colored coins works and harmonization with the bitcoin development path which could put an issue of colored coin at risk?
I'm not aware of any problems which can get in the way of the approach I'm currently using (i.e. specifically "order-based coloring" and "padded order-based coloring"). But this issues was brought up in Spring, and I think the best way to address this is to make migration to a different system easy.
The general idea is that it is always possible to identify an owner of a colored coin at a certain block, so it's possible to offer an automatized migration process as owner can be authenticated automatically.
4. What is being developed now and what is planned?
NGCCC and WebcoinX are being developed in parallel.
NGCCC will rely on a local bitcoind, and use external services for speedup. Currently we have some crude prototype (called CCoinDemo), I'm working on making it fast, secure and usable. I'm working on it alone.
I think NGCCC is the shortest path to a secure, independent colored coin client. But it might be somewhat inconvenient as it requires local bitcoind/bitcoin-qt.
(Although it has flexible architecture, so it's probably possible to add an option to use electrum-server.)
WebcoinX is a web client, we are currently working on a testnet demo which will showcase colored coin.
Also we plan to make it secure and make it work on mainnet, but progress is little to non-existent because out of a team we have now only I'm able to work on its core, and I don't have time for this between NGCCC and posting shit on forums.
If more developers will join the effort, plans can change. For example, we can make a colored coin version of Electrum. It all depends on who joins.
Is there some other online forum where dialog is taking place?
There is some discussion in mailing list/google group:
https://groups.google.com/forum/#!forum/bitcoinX
But discussion about specifics of development is in email.