I was wrong about needing the whole chain:
https://bitcointalk.org/index.php?topic=106373.msg4585334#msg4585334You are right that they need to traverse from genesis of the colour though.
Miners can only verify colours they know about.
I suspect that coloured coins are only practical at all thanks to no one having to know about / track any colours other than the few or many or millions that they are interested in.
How much extra information and processing does each colour involve?
How much more effective would spamming colours be than spamming ordinary transactions?
From that, how much fee will creating a colour need to have to adequately pay for all the excess storage and lookups?
Do miners need to go find the contract of each colour or its kernel definition or whatever?
Do they only do that once then store it forever, or do they need to periodically check that it has not been superceded or altered etc?
A "catalogue of many or most of the colours ever used" site/server might be a massive service all on its own, it is reasonable to expect all miners to in effect subsume all the info from all such sites about al colours in order to mine?
Does such info maybe even get put into the blockchain to eliminate the need to go look at third party URLs to find the kernel for the colour?
What happens if someone gets a miner to record information about a colour into the blockchain then changes the data at the URL after the blockchain already processed the colour in accordance with the colour-kernel the prior state of the URL had claimed that colour uses?
What do the current coloured coin developers say about these kinds of questions?
It seems to me one could easily break a nicely working high security blockchain by trying to jam coloured coin client stuff into its mining algorithms.
Normally coloured coin clients in effect do their own "mining" in the sense of verifying transactions.
Also, what do you even mean by invalid coloured coin transactions? Aren't all possibilities accounted for, typically by resolving to erasure/loss of colour? So that maybe what you are thinking is an invalid colour-transaction is actually a perfectly valid uncolouring?
-MarkM-