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Author Topic: Colored coins VS Mastercoins - Which one is better?  (Read 18631 times)
davidgdg
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October 29, 2013, 11:02:15 AM
 #81

I just read a little bit of both schemes. I'm confused by these design

They want to use a token to present any asset. But assets are not like money, usually they don't have fungibility, that requires a whole lot of validation of each assets: What if the underlying asset is destroied or lost? Who is going to audit the quality of each asset? etc ...

Besides, when it comes to purchase of assets, people seldom need an online system, they will meet personally and do the deal in person

Anyway, the abstraction level of both design is low, they are only suitable for a very limited sample of real world situation where the presented asset is standardized, like 99.99% pure gold bar. But, who is going to make sure you didn't get a tungsten stick? That gold bar is not locked together with a token in blockchain

Actually the validation problem is the core reason that an exchange can not be really carried out on a P2P network: Bitcoin's genuinity is validated by the blockchain, there is no problem at this end, but at the other end, you always need to rely on some authority to ensure its validity. On a P2P exchange if you receive lots of counterfeited USD, what you can do with them?  Wink
The main use case is company stock. You have to believe in the company of course, but you don't need to rely on any centralized, cumbersome stock exchange.

Surely it would work for a contractual right of any kind (such as bonds, options and other derivatives etc). Also, for any kind of personal property that can be net-enabled? 

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October 29, 2013, 12:08:52 PM
 #82

Oh right, lots and lots of money - keep on going you blinded idiots.

The real power behind Mastercoin is the Naysayers who can't figure it out.  This is what drives the price so high.  Nobody in Mastercoin is looking for 'get rich quick' - none of the top holders are selling despite 10X returns.  Clear sign that their true interests are in the long term. 

Did you miss the bus?

The problem with that assumption is that I 'missed the bus' with Bitcoin too, right?

Wrong.

I fully realize the implications of what Master-get-rich-coin is about, well enough, thanks. And you will too - when a) someone eats their lunch for them, and b) the implication of a non-anonymous developer becomes an obvious failing.

Keep going, full steam ahead - never mind that iceberg!

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October 29, 2013, 10:01:08 PM
 #83

I just read a little bit of both schemes. I'm confused by these design

They want to use a token to present any asset. But assets are not like money, usually they don't have fungibility, that requires a whole lot of validation of each assets: What if the underlying asset is destroied or lost? Who is going to audit the quality of each asset? etc ...

Besides, when it comes to purchase of assets, people seldom need an online system, they will meet personally and do the deal in person

Anyway, the abstraction level of both design is low, they are only suitable for a very limited sample of real world situation where the presented asset is standardized, like 99.99% pure gold bar. But, who is going to make sure you didn't get a tungsten stick? That gold bar is not locked together with a token in blockchain

Actually the validation problem is the core reason that an exchange can not be really carried out on a P2P network: Bitcoin's genuinity is validated by the blockchain, there is no problem at this end, but at the other end, you always need to rely on some authority to ensure its validity. On a P2P exchange if you receive lots of counterfeited USD, what you can do with them?  Wink
The main use case is company stock. You have to believe in the company of course, but you don't need to rely on any centralized, cumbersome stock exchange.

Surely it would work for a contractual right of any kind (such as bonds, options and other derivatives etc). Also, for any kind of personal property that can be net-enabled? 

Yes.  Both CC and MSC should handle this from my understanding.

BTW I am writing a weekly update blog for Mastercoin in case you want to track progress: http://blog.mastercoin.org/


WINGS - get paid to forecast ICO valuations http://experimental.wings.ai - over $5 million in new token and Ether pay outs already
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October 30, 2013, 04:10:43 PM
 #84

Question: If a company wants to issue 100,000 shares of stock, and wants to track each individual share, i.e. each share needs to have an ID associated with it, which coin should they use?
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October 30, 2013, 04:52:51 PM
 #85

Question: If a company wants to issue 100,000 shares of stock, and wants to track each individual share, i.e. each share needs to have an ID associated with it, which coin should they use?
You could do it in CC with advanced color kernels. However note that people will still be able to do mixing transactions.

JR should comment on the ability to do it with Mastercoin.

Surely it would work for a contractual right of any kind (such as bonds, options and other derivatives etc). Also, for any kind of personal property that can be net-enabled? 
Yes.  Both CC and MSC should handle this from my understanding.
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October 30, 2013, 05:33:43 PM
 #86

Question: If a company wants to issue 100,000 shares of stock, and wants to track each individual share, i.e. each share needs to have an ID associated with it, which coin should they use?

Issuing 100k shares of stock, yes. What do you want ID numbers for? If it's to pay dividends, we'll have support for that. If you want to put 100k individual unique numbers in the block chain for some reason, please don't! You could write a script to generate 100k unique pieces of property, but that would be very expensive, both for you and for the block chain!

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October 30, 2013, 06:06:13 PM
 #87

Question: If a company wants to issue 100,000 shares of stock, and wants to track each individual share, i.e. each share needs to have an ID associated with it, which coin should they use?

Issuing 100k shares of stock, yes. What do you want ID numbers for? If it's to pay dividends, we'll have support for that. If you want to put 100k individual unique numbers in the block chain for some reason, please don't! You could write a script to generate 100k unique pieces of property, but that would be very expensive, both for you and for the block chain!

I was just thinking it would be great to offer that capability, especially if not all shares were created equal (e.g. preferred, non-preferred), furthermore, it can give  peace of mind to the shareholders if an ownership# is added.

People can trade individual shares, blocks of shares, but not fractional.

Yes, I do realize it's not a good idea to store this kind of information in btc blockchain itself.

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October 30, 2013, 06:16:12 PM
 #88

Question: If a company wants to issue 100,000 shares of stock, and wants to track each individual share, i.e. each share needs to have an ID associated with it, which coin should they use?

Issuing 100k shares of stock, yes. What do you want ID numbers for? If it's to pay dividends, we'll have support for that. If you want to put 100k individual unique numbers in the block chain for some reason, please don't! You could write a script to generate 100k unique pieces of property, but that would be very expensive, both for you and for the block chain!

I was just thinking it would be great to offer that capability, especially if not all shares were created equal (e.g. preferred, non-preferred), furthermore, it can give  peace of mind to the shareholders if an ownership# is added.

People can trade individual shares, blocks of shares, but not fractional.

Yes, I do realize it's not a good idea to store this kind of information in btc blockchain itself.


Ah. MasterCoin would support preferred and non-preferred. That would just be issuing two properties - for instance 20k shares preferred, and 80k shares non-preferred.

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November 07, 2013, 05:17:10 PM
 #89

There are 21 million million Bitcoins that will ever exist.
There are 600 thousand Mastercoins that will ever exist.

I predict each Mastercoin will easily be worth between 20-30 Bitcoins.
But if we want to be conservative each Mastercoin is actually going to be worth at least 1 Bitcoin. Assume that everyone who has at least 1 Bitcoin will want at least 1 Mastercoin and you can easily see that the price of Mastercoins will easily surpass 1:1.

As for the particulars of how much this or that costs in Mastercoin, who knows? But you can be sure when people figure out what they can do, everyone will want some.

I think the balance JR has to reach is to have enough Mastercoins that they wont ever run out, but have it be scarce enough that the value can continue to appreciate over time.

600,000 is a good number, but the main threat I see to Mastercoin value will be from Bitshares. People will probably sell Mastercoins for Bitshares if that idea actually worked as well as they say it will, but it's very possible that Mastercoin could have first mover advantage and work better too.

JR will have to explain the math of Mastercoin, I don't fully understand and my calculations could be way off, but based on my calculations I'm not selling Mastercoins for less than 2 BTC each. The reason is I predict the demand for Mastercoins will be far greater than the demand for Bitcoins. People will be buying Bitcoins in order to buy Mastercoins so they can do certain things which can only be done using Mastercoins.

Whether my math is off or not depends on whether or not Mastercoins are destroyed after use. If they are destroyed bit by bit over time as I understand it then they'll be absolutely deflationary. The rate of that destruction would determine how deflationary and JR has to answer that. In his whitepaper he suggests 1.5 Mastercoins for 1000 Bitcoins. My calculations suggest that everyone will want to own a few Mastercoins and the price would for sure be at least a few Bitcoins probably prior to the launch and could get as high as 30 Bitcoins per Mastercoin depending on how it works.

I believe that is all assuming Mastercoin does something that colored coins can not. I'm not convinced that is the case. If I was a business who wanted to do an IPO why would I choose Mastercoin to represent my shares over colored coins? If both do the same thing, why convert some of my BTC to MC when CC does what I need? Especially since CC allows shareholders to not have to have the whole blockchain for security? If the price of MC gets expensive why choose it? I'd rather pick BTC CC and then it will cost just a few cents a share to start.


It just seems MC hypes a lot of the future potential and people are seeing it as another currency that will have massive demand but they are forgetting that CC has the same potential for everyone and will be dirt cheap because its just uses a few cents worth of BTC to use.


This is a great video where an Executive Architect from IBM basically explains the colored coins concept https://www.youtube.com/watch?v=VDO7TDMlxsY

If I was a business who wanted to do an IPO why would I choose Mastercoin to represent my shares over colored coins?


This is a great question which I haven't seen answered yet.
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November 07, 2013, 05:21:53 PM
 #90

I just read a little bit of both schemes. I'm confused by these design

They want to use a token to present any asset. But assets are not like money, usually they don't have fungibility, that requires a whole lot of validation of each assets: What if the underlying asset is destroied or lost? Who is going to audit the quality of each asset? etc ...

Besides, when it comes to purchase of assets, people seldom need an online system, they will meet personally and do the deal in person

Anyway, the abstraction level of both design is low, they are only suitable for a very limited sample of real world situation where the presented asset is standardized, like 99.99% pure gold bar. But, who is going to make sure you didn't get a tungsten stick? That gold bar is not locked together with a token in blockchain

Actually the validation problem is the core reason that an exchange can not be really carried out on a P2P network: Bitcoin's genuinity is validated by the blockchain, there is no problem at this end, but at the other end, you always need to rely on some authority to ensure its validity. On a P2P exchange if you receive lots of counterfeited USD, what you can do with them?  Wink
The main use case is company stock. You have to believe in the company of course, but you don't need to rely on any centralized, cumbersome stock exchange.

Surely it would work for a contractual right of any kind (such as bonds, options and other derivatives etc). Also, for any kind of personal property that can be net-enabled? 

Yes.  Both CC and MSC should handle this from my understanding.

BTW I am writing a weekly update blog for Mastercoin in case you want to track progress: http://blog.mastercoin.org/



nice blog thx sharing

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November 07, 2013, 06:32:09 PM
 #91

This thread's title is borderline racist.


 Grin
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November 07, 2013, 06:41:38 PM
 #92

There are 21 million million Bitcoins that will ever exist.
There are 600 thousand Mastercoins that will ever exist.

I predict each Mastercoin will easily be worth between 20-30 Bitcoins.
But if we want to be conservative each Mastercoin is actually going to be worth at least 1 Bitcoin. Assume that everyone who has at least 1 Bitcoin will want at least 1 Mastercoin and you can easily see that the price of Mastercoins will easily surpass 1:1.

As for the particulars of how much this or that costs in Mastercoin, who knows? But you can be sure when people figure out what they can do, everyone will want some.

I think the balance JR has to reach is to have enough Mastercoins that they wont ever run out, but have it be scarce enough that the value can continue to appreciate over time.

600,000 is a good number, but the main threat I see to Mastercoin value will be from Bitshares. People will probably sell Mastercoins for Bitshares if that idea actually worked as well as they say it will, but it's very possible that Mastercoin could have first mover advantage and work better too.

JR will have to explain the math of Mastercoin, I don't fully understand and my calculations could be way off, but based on my calculations I'm not selling Mastercoins for less than 2 BTC each. The reason is I predict the demand for Mastercoins will be far greater than the demand for Bitcoins. People will be buying Bitcoins in order to buy Mastercoins so they can do certain things which can only be done using Mastercoins.

Whether my math is off or not depends on whether or not Mastercoins are destroyed after use. If they are destroyed bit by bit over time as I understand it then they'll be absolutely deflationary. The rate of that destruction would determine how deflationary and JR has to answer that. In his whitepaper he suggests 1.5 Mastercoins for 1000 Bitcoins. My calculations suggest that everyone will want to own a few Mastercoins and the price would for sure be at least a few Bitcoins probably prior to the launch and could get as high as 30 Bitcoins per Mastercoin depending on how it works.

I believe that is all assuming Mastercoin does something that colored coins can not. I'm not convinced that is the case. If I was a business who wanted to do an IPO why would I choose Mastercoin to represent my shares over colored coins? If both do the same thing, why convert some of my BTC to MC when CC does what I need? Especially since CC allows shareholders to not have to have the whole blockchain for security? If the price of MC gets expensive why choose it? I'd rather pick BTC CC and then it will cost just a few cents a share to start.


It just seems MC hypes a lot of the future potential and people are seeing it as another currency that will have massive demand but they are forgetting that CC has the same potential for everyone and will be dirt cheap because its just uses a few cents worth of BTC to use.


This is a great video where an Executive Architect from IBM basically explains the colored coins concept https://www.youtube.com/watch?v=VDO7TDMlxsY

If I was a business who wanted to do an IPO why would I choose Mastercoin to represent my shares over colored coins?


This is a great question which I haven't seen answered yet.

Because you have Mastercoins and because Mastercoins are stable. I am not convinced Colored Coins will be more stable than Bitcoin but if it can then it will do well. For me I like the fact that Mastercoin provides an escrow because I shouldn't have to trust the issuer to honor the contract and having Mastercoins as escrow will allow for people to have a place to put their wealth to use creating new currencies in a way which isn't too much risk. I also like that Mastercoin can act as a unit of measure for the entire system where all wealth in the system can be determined by an unchanging Mastercoin. There will be very minimal inflation in Mastercoin compared to Bitcoin and that means a lot less volatility and a much better measuring unit.

If you like Colored Coin then use it, but if you like Mastercoin then use it. Some people will certainly pick one or the other, some will use both. Some will use Bitshares and some will use all three.

Why wouldn't you use all three?
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November 07, 2013, 06:55:37 PM
 #93


Because you have Mastercoins and because Mastercoins are stable. I am not convinced Colored Coins will be more stable than Bitcoin but if it can then it will do well. For me I like the fact that Mastercoin provides an escrow because I shouldn't have to trust the issuer to honor the contract and having Mastercoins as escrow will allow for people to have a place to put their wealth to use creating new currencies in a way which isn't too much risk. I also like that Mastercoin can act as a unit of measure for the entire system where all wealth in the system can be determined by an unchanging Mastercoin. There will be very minimal inflation in Mastercoin compared to Bitcoin and that means a lot less volatility and a much better measuring unit.

If you like Colored Coin then use it, but if you like Mastercoin then use it. Some people will certainly pick one or the other, some will use both. Some will use Bitshares and some will use all three.

Why wouldn't you use all three?

You could use all three but what I am interested in is what system is best for asset management such as stocks for a company. The thing with Colored Coins from what I understand is that it IS Bitcoin. It is just about assigning certain outputs with a certain value other than their corresponding Bitcoin value.
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November 07, 2013, 07:02:38 PM
 #94

managed to raise funding with promises of getting rich quick.
Total nonsense.  It sounds like you are bitter that colored coins has no viable funding model.  JR never wrote a word about 'get rich quick'.  Don't try to associate scammy fund raising with Mastercoin just because your pet project is dead on arrival.

Colored coins are technically superior and based on a much stronger conceptual foundation.
More nonsense.  Mastercoin has some less than perfect tricks - they are trying to find ways to clean those up.  Colored coins are in fact technically inferior because they will never be able to support most of the functionality being build into Mastercoin protocol.  You are unbelievable Meni.  

Are you going to continue to beat down Mastercoin merely because you missed the deadline to participate?  What a stupid reason to argue colored coins is 'superior'.  Colored coins is dead.  That project is finished and nobody is working on it.  If somebody does decide to waste some hours on it, they do not get paid nor benefit in any other fashion.  It is merely a fun place to burn up a few hours while you are supposed to be doing real work.  It uses the same non-profit model as all the other loser projects which are assured to make little or no progress.  Colored coins is and always will be a mere hobby for people who love to waste time.  Mastercoin, if they crack a few more technical hurdles will be a very worthy and profitable project.  Don't worry, it is not too late.  You can buy Mastercoin here: https://bitcointalk.org/index.php?topic=287145.320  Actually a very good deal at .03 BTC / MSC.  Note the last buyer was the project leader JR!  Even JR is paying 3X the original price.  

Mastercoin made fantastic progress in the last month.  Colored Coin - got a pretty video with a stupid mascot.  


lets not get nasty... but I do agree there are a lot of dubious claims being thrown around these days regarding various open source projects.  Real money has been spent on Color Coins and for this expenditure to be considered profitable, Color Coins must become a standards for a given set of functions.  At this point I think a number of issues have emerged which suggest this is probably not happening.

There are a number of projects in this space competing for attention.  Color Coins is a respectable idea, the primary problem is that:

It will not only be subject to the issues regarding block chain bloat, microtransactions, and coin dust- it will exacerbate them greatly.  Think Number of Transactions to the power of Number Color Coins.  It's not viable in my view, and the moment you use it for complex financial functions you are seriously pushing performance capacity.  This dovetails into all the other issues that Bitcoin faces in it's natural state.

My project, Confidence Chains, factors out Proof Of Work altogether.  One of the members on the BitcoinX continues to attack me every time I contribute to the conversations.  I originally brought up the issue of Microtransactions/Coin Dust, which this person denounced as irrelevant, later when it became obvious this was a big problem, he pretended as if he knew about it all along(check the list records for evidence of this).  I certainly wish the project well, and Color Coins offers one feature that Confidence Chains does not, and that is Bitcoin's zero trust model.  Confidence Chains gives you much much more though including Decentralized Exchanges, Bond Auctions, and many more features that will be described in upcoming publications.  Virtually any Financial device is possible to implement efficiently and cleanly.  Importantly, it gives you instantaneous transactions and that's a critical factor in many applications.  At best they will need to build protocols ON TOP OF Bitcoin, that are probably MORE complex and difficult to support than basic Confidence Chains.  Meanwhile Confidence Chains gives you these valuable functions out of the box.  I think the inertia that remains is the effort required in order to understand the basic algorithm- it does not behave like Bitcoin and you need to know quite a bit about the basic elements of Bitcoin in order to grasp it.  It's gaining ground at a steady pace though.

https://docs.google.com/file/d/0BwUFHE6KYsM0ZkxLVmFwbXQ3ck0/edit?usp=sharing  

But anyway, we need to have an environment of respect AND competition.  There is reason to be angry if you throw significant money at something and an alternative idea pops up.  C'est la vie, suck it up, etc.  But let's be fair, Color Coins was a great effort and deserves respect for it's contribution to the space.

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November 07, 2013, 07:05:29 PM
 #95


The main use case is company stock. You have to believe in the company of course, but you don't need to rely on any centralized, cumbersome stock exchange.

And this is why, Meni, that Color Coins are generally irrelevant.  Bitcoin was interesting because it had ZERO TRUST, not only at the technology level, but the financial level as well.  Nothing was BACKING it.  Color Coins suggest BACKING and exchangeability, thus you've removed zero trust AND you can safely remove the technological zero-trust(POW) from the equation as well.  This is what has been done with Confidence Chains.

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November 07, 2013, 07:07:38 PM
 #96



You could use all three but what I am interested in is what system is best for asset management such as stocks for a company. The thing with Colored Coins from what I understand is that it IS Bitcoin. It is just about assigning certain outputs with a certain value other than their corresponding Bitcoin value.

Peer-to-Peer Asset Issuance And Transactions With Confidence Chains:

https://docs.google.com/file/d/0BwUFHE6KYsM0ZkxLVmFwbXQ3ck0/edit?usp=sharing

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November 07, 2013, 07:45:26 PM
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You could use all three but what I am interested in is what system is best for asset management such as stocks for a company. The thing with Colored Coins from what I understand is that it IS Bitcoin. It is just about assigning certain outputs with a certain value other than their corresponding Bitcoin value.

Peer-to-Peer Asset Issuance And Transactions With Confidence Chains:

https://docs.google.com/file/d/0BwUFHE6KYsM0ZkxLVmFwbXQ3ck0/edit?usp=sharing

Really couldn't digest it all clearly but does this use blockchains other than the Bitcoin blockchain? The marvelous thing about bitcoin is that you have MASSIVE amounts of hardware backing its security of the blockchain and verification system. I enjoy colored coins because it takes advantage of the bitcoin blockchain which should be the protocol from which system can be built upon.
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November 07, 2013, 08:16:49 PM
 #98



You could use all three but what I am interested in is what system is best for asset management such as stocks for a company. The thing with Colored Coins from what I understand is that it IS Bitcoin. It is just about assigning certain outputs with a certain value other than their corresponding Bitcoin value.

Peer-to-Peer Asset Issuance And Transactions With Confidence Chains:

https://docs.google.com/file/d/0BwUFHE6KYsM0ZkxLVmFwbXQ3ck0/edit?usp=sharing

Really couldn't digest it all clearly but does this use blockchains other than the Bitcoin blockchain? The marvelous thing about bitcoin is that you have MASSIVE amounts of hardware backing its security of the blockchain and verification system. I enjoy colored coins because it takes advantage of the bitcoin blockchain which should be the protocol from which system can be built upon.

It does use block chains similar to Bitcoin.  It DOES NOT use THE BLOCKCHAIN- this seems to be the point of departure between Confidence Chains and the other technologies in this class.

There are problems with using the BTC Blockchain for other purposes.  For instance Meni Rosenfeld posted a video recently where one of the speakers claims that the blockchain is 'free'.  It's not free, and that seems to be a common misperception, and this thinking is what led to the problems of COIN DUST.  When you start to use the Blockchain for all sorts of things(perhaps some clearly abusive others are useful), than this will greatly magnify this problem of what is permissible use of the block chain and what is not.  It also suggests some very complex problems about the economics of mining.  In addition complex financial functions require judgement- how will we implement that using the blockchain?  Already this group has demonstrated a lack of vision in this department.  It was quite obvious that microtransactions would be a problem however the term did not even appear on the list until I brought it up.

Clearly the public has not fully grasped what Confidence Chains is.  I often get emails asking how someone can mine Confidence Chains for profit.  note: there is no mining in Confidence Chains. Smiley

It's a major departure from the concept of Bitcoin.  A break with Bitcoin ideas is appropriate when you start to venture into the world of financial instruments.  Re. some of the other projects, Im instantly wary of any project that wants me to buy some of their credits up front for some awesome feature in the future(Ripple Redux?).  As soon as someone defines some kind of requirement, we get a dozen people log in here and post some new project that claims to have a solution.

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November 08, 2013, 03:09:18 AM
 #99


Because you have Mastercoins and because Mastercoins are stable. I am not convinced Colored Coins will be more stable than Bitcoin but if it can then it will do well. For me I like the fact that Mastercoin provides an escrow because I shouldn't have to trust the issuer to honor the contract and having Mastercoins as escrow will allow for people to have a place to put their wealth to use creating new currencies in a way which isn't too much risk. I also like that Mastercoin can act as a unit of measure for the entire system where all wealth in the system can be determined by an unchanging Mastercoin. There will be very minimal inflation in Mastercoin compared to Bitcoin and that means a lot less volatility and a much better measuring unit.

If you like Colored Coin then use it, but if you like Mastercoin then use it. Some people will certainly pick one or the other, some will use both. Some will use Bitshares and some will use all three.

Why wouldn't you use all three?

You could use all three but what I am interested in is what system is best for asset management such as stocks for a company. The thing with Colored Coins from what I understand is that it IS Bitcoin. It is just about assigning certain outputs with a certain value other than their corresponding Bitcoin value.

Exactly, it is Bitcoin. So if something happens to Bitcoin what happens to your stock?
If something happens to Bitcoin then Mastercoin can just use another blockchain. If something happens to Bitcoin then Bitshares has it's own blockchain. Colored Coin has no alternative so if something happens to Bitcoin such as if it gets politically attacked, or if there is some problem with it found it will affect Colored Coin because ColoredCoin is not platform independent.

Unless you are a business oriented individual are prone to believe that Bitcoin will be the only cryptocurrency, that Bitcoin will be the final cryptocurrency, and that whatever your doing should die with Bitcoin, then perhaps it's in your self interest to diversify.

For that reason if I had to choose between Colored Coin and Mastercoin I would choose Mastercoin. Between Colored Coin and Bitshares I would choose Bitshares.

Additionally I would choose Mastercoin because I think you need a unit of measurement. For example the amount of energy in the universe is the same from the big bang right now and it never changes. Energy is never created or destroyed. This gives us the only sense of stability we have in this universe and allows for all the laws of physics, structure, and clarity in the electromagnetic spectrum.

Bitcoin in my opinion is not a good foundation from which to build a unit of measurement because it's still in an inflationary period. Mastercoin is in an inflationary period too but we know exactly the rate that Mastercoins will be created and the bonus Mastercoins wont create any volatility because they'll be used for development and we are talking an nominal amount.

So for our purposes Mastercoin will be fixed in time/space, will become very stable, and will serve as a good unit of measurement. I don't believe Bitshares will be able to do this as well because it too will be mined, but I think at least with Bitshares that mining will provide redundancy and diversification. I think redundancy and diversification are good for the long term security of cryptocurrencies in general because if someone could destroy the Bitcoin blockchain they would not destroy Bitshares or Mastercoin but that would destroy ColoredCoin's Bitcoin implementation.

There is a way around this which involves implementing ColoredCoin on Litecoin, Primecoin, PPCoin and Freicoin. I think if it's implemented on enough altcoins then you could theoretically have redundancy but then you would have the problem of volatility and all these separate implementations would run any chances of trying to use it as a standard unit of measurement.

How many atoms exist? Well if the number changes depending on how you look at it then it's impossible to form any includes on anything in the universe. That number has to be fixed, set in stone, unchanging, and then we can say gold has an atomic weight of 196.966569. We know gold has 79 neutrons. We know where gold rests within the 10^78 atoms in the visible universe and that says something.

ColoredCoin wont be able to do that because it's not ever going to be a precise measure of the value of something else because it's abstract (Bitcoins posing as ColoredCoins) rather than something concrete (set in stone). If I ask how many ColoredCoins will exist on the Bitcoin blockchain no one can tell me that answer. If we assume every Bitcoin can also be a Colored Coin that is the closest thing to an answer I could come up with.

If I ask how many Mastercoins will exist in the Bitcoin universe the exact measurement is 619478.59338440. This number will not change and cannot change ever.

Knowing this and knowing that most of the Mastercoins that shall exist came into existence instantaneously, it can become very stable. If you want to know how many atoms are in an oz of gold you can ask, and if you want to know how many Mastercoins are in goldcoins you can find that out as well. The amount of Mastercoins which make up a gold coin is critical for measuring the value backing the gold coin escrow. The gold in their vault might or might not exist but we will know the value in their escrow exists.

The main use case is company stock. You have to believe in the company of course, but you don't need to rely on any centralized, cumbersome stock exchange.

And this is why, Meni, that Color Coins are generally irrelevant.  Bitcoin was interesting because it had ZERO TRUST, not only at the technology level, but the financial level as well.  Nothing was BACKING it.  Color Coins suggest BACKING and exchangeability, thus you've removed zero trust AND you can safely remove the technological zero-trust(POW) from the equation as well.  This is what has been done with Confidence Chains.

This is why Mastercoin relies on escrow. You don't have to trust the issuer but the system definitely works better if you can. The other scheme is contract for difference which doesn't require any trust at all except in mathematics.

MilkyWayMasta
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November 08, 2013, 04:16:35 AM
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Exactly, it is Bitcoin. So if something happens to Bitcoin what happens to your stock?
If something happens to Bitcoin then Mastercoin can just use another blockchain. If something happens to Bitcoin then Bitshares has it's own blockchain. Colored Coin has no alternative so if something happens to Bitcoin such as if it gets politically attacked, or if there is some problem with it found it will affect Colored Coin because ColoredCoin is not platform independent.

Something could happen to the other blockchains. I don't see what you mean by "politically attacked" as Bitcoin is decentralized and therefor very hard to attack politically, just look at piracy.

Unless you are a business oriented individual are prone to believe that Bitcoin will be the only cryptocurrency, that Bitcoin will be the final cryptocurrency, and that whatever your doing should die with Bitcoin, then perhaps it's in your self interest to diversify.

I just think it is wise to take advantage of the power the bitcoin infrastructure which is the largest cryptocurrency protocol by a long shot and it doesnt look like its going to stop anytime soon, but you are right, it is wise to look at all the alternatives

ColoredCoin wont be able to do that because it's not ever going to be a precise measure of the value of something else because it's abstract (Bitcoins posing as ColoredCoins) rather than something concrete (set in stone). If I ask how many ColoredCoins will exist on the Bitcoin blockchain no one can tell me that answer. If we assume every Bitcoin can also be a Colored Coin that is the closest thing to an answer I could come up with.

If I ask how many Mastercoins will exist in the Bitcoin universe the exact measurement is 619478.59338440. This number will not change and cannot change ever.

I dont get what you are trying to say here. Mastercoin sounds more and more like an altcoin to me the more I hear people try to "pitch" it. The whole thing about Colored Coins IS about setting a certain amount of satoshis as being worth (in the case of a company share) something concrete in which the p2p market sets the price by how the company is doing and through its business plans. 


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