Hey guys, I am curious about this programmable nature of Bitcoin that i am seeing at minute 3:00 in this video:
https://www.youtube.com/watch?v=YIVAluSL9SUFrom what they said there, you could program every single Satoshi to act as a token that could only be spent only where you want it to spend. For example programming Bitcoin to be available just for healthcare, or programming them to come back to you if your receiver doesn't spend them or a ton of other things. It sounded amazing but I am never seeing or hearing about this aspect of Bitcoin elsewhere. Is it some kind of Bitcoin functionality that was lost along the way or what exactly?
PS: I did this exact thread in the general discussion but i thought that it fits better here actually. Sorry for my double posts.
Yes, Bitcoin can do some of these things on the blockchain. Some of the things in the video require additional support in the ecosystem beyond just the blockchain, i.e. there is no way that a Bitcoin can be proven to represent a barrel of oil using only the blockchain.
Colored coins allow for an external institution to "paint" or "stain" coins so that these colored coins can be taken to represent real-world objects as long as you trust the organization that colored them. As pointed out on the Wiki, you don't have to associate the token(s) with a particular satoshi, just a metadata entry in the blockchain will suffice.
You can place other kinds of conditions on coins through the use of hashlocks and timelocks. This is how Lightning Networks are built. But I could give you a coin that you can't spend for X amount of time and then, after that, it becomes yours in the following way: First, I hashlock the coin, meaning, you have to know a large secret number Y that hashes to a value W, i.e. W=hash(Y), in order to access the coin. But since I intend to give you the coin (only after some time has passed), I go ahead and give you
most of Y, but leave the rest for you to figure out on your own. This is like giving you a partially solved Sudoku and leaving you to solve the rest... once you've solved it, then you own the coin. The only way to get Y (thus unlocking the coin) is to try all the possible combinations for the missing part of Y. So, if there are, say, 10 trillion possible combinations for the missing part of Y, you're going to have to try (on average) about 5 trillion. If your computer can check a billion combinations per second, it will take you about 5,000 seconds or about 83 minutes to crack the coin. So, just using this one simple trick, I've created a "time-delay coin".
Bitcoin Script is what makes these kinds of features possible.
