Colored Coins and Coinprism takes Bitcoin to a whole new level

[Peter R]

Peter send me a WTK! 13sC6RxsHGkvaUWeyG6X295GHoVXPux8Ug

1 WTK has been sent to 13sC6RxsHGkvaUWeyG6X295GHoVXPux8Ug!

[bluemeanie1]

Peter send me a WTK! 13sC6RxsHGkvaUWeyG6X295GHoVXPux8Ug

bluemeanie1:  Hopefully Bitcoin CAN scale, because THIS is the true promise of the blockchain.  Entire industries whose primary purpose is to hold your stocks and bonds will no longer be necessary, which will significantly increase the efficiency of the financial system.

Bitcoin was not designed to do this.

while some see this as an 'innovation' other see it as abuse.  Lets see what happens when the number of transactions multiplies by a factor of a 1000.

-bm

[bluemeanie1]

Color Coins is going to overload the block chain and cause major problems with the core bitcoin features.

-bm

Interesting question.

If Colored Coins could choke Bitcoin it means the anybody can do such an attack regardless of Colored Coins. I think that's why we have the 540 Satoshi dust limit.

My understanding is that currently there is a 7 transaction per second limit on Bitcoin, that means if you send 5,000+ transactions in 10 minutes it would go beyond the limit. You can do 5,000 transactions for just 0.027 BTC.

no your thinking is off.  Color Coins and Counterparty create an INCENTIVE to create many many more transactions that don't have a strict BTC value.

all these discussions already took place on the BitcoinX list.

-bm

[iraszl]

@bish5555 and @iraszl

I sent each of you one worthless token (1 WTC).  I only have 8 left because I only issued 10.  So these things are rare lol  

Got it, thanks! It's interesting because you sent it to my Owl Coin address and now it's listed under that account. I didn't realize that can be done.

People are sending each other all kinds of coins. I got 100,000 USDollars too: https://www.coinprism.com/blockchain/color/34zK2mBo4uQFZ5Daqgb8JngnBNrKgPnKzE Sharing the wealth!

You can ask for Gold Colored Coins here: http://www.reddit.com/r/Bitcoin/comments/25lct9/colored_coins_give_away_btcblue/

[iraszl]

no your thinking is off.  Color Coins and Counterparty create an INCENTIVE to create many many more transactions that don't have a strict BTC value.

all these discussions already took place on the BitcoinX list.

-bm

You mean killing Bitcoin just for the sake of it or to piss off bitcoiners for the price of a few dollars wasn't enough incentive?

[Peter R]

When I create a colored coin (it gave me an error BTW), how is my description (read contract) and other info about the coin stored on the blockchain?

I don't believe the description is stored in the blockchain for privacy reasons--there is no need to make information about the colored coins public (other than the fact that they exist).  I think the idea is that open-assets is simply an accounting protocol.  It makes no attempt to enforce or make transparent the promises made by the issuer.

(BTW--I think Coinprism is pulling the information you see about WTK from a URL.)

I know its probably not in the client yet, but WRT the protocol, can I send a small amount of BTC to every address that holds my coin (think interest payment)?

I believe colored coins and normal bitcoins can coincide at the same address and I think this was done for the reason you said (so that interest or dividends could be issued directly to the address where the colored-coins are held).  

[bluemeanie1]

no your thinking is off.  Color Coins and Counterparty create an INCENTIVE to create many many more transactions that don't have a strict BTC value.

all these discussions already took place on the BitcoinX list.

-bm

You mean killing Bitcoin just for the sake of it or to piss off bitcoiners for the price of a few dollars wasn't enough incentive?

what?

I guess time will tell... we KNOW the number of txs are going to multiply- what's your prediction?  smooth sailing?  are you an active backer of this technology project?

-bm

[iraszl]

what?

I guess time will tell... we KNOW the number of txs are going to multiply- what's your prediction?  smooth sailing?  are you an active backer of this technology project?

-bm

No, I'm not in any way related to Coinprism. I certainly don't want to harm bitcoin, but the whole thing is an experiment and it should be tested in this way too. We can rely on people not doing projects like Coinprism in order to keep Bitcoin running smooth. It has to defend itself if it's a potential problem.

I don't have a prediction. I don't have enough knowledge. I guess it will work fine.

[Peter R]

Color Coins is going to overload the block chain and cause major problems with the core bitcoin features.

Interesting question.

If Colored Coins could choke Bitcoin it means the anybody can do such an attack regardless of Colored Coins. I think that's why we have the 540 Satoshi dust limit.

Exactly.  If colored coins can hurt bitcoin due to blockchain size issues, then bitcoin would be hurt by an attacker anyways.  I hope we do see an increase in the number of transactions thanks to colored coins.  It will motivate discussion about raising the block limit, reducing the orphan cost by implementing block propagation by hash, and floating the miners fee.

Since colored coins uses OP_RETURN to store the metadata, there is also no issue with the UXTO becoming polluted.

[bluemeanie1]

many things could happen.  I know for certain the transactions won't be cheap, the miners need an incentive to carry them.  If we continue to have more mining monopolization, then they could hold these networks hostage and charge exorbitant fees.  My primary concern though is if Bitcoin can even handle this sort of thing.  The technology is buckling on the current capacity, now were about to multiply it by 1000?  

the COIN_DUST limit was created to keep trivial transactions off the network, and the response was to hover just about the COIN_DUST limit?  so the devs will just raise it again, pumping more money into the miners.  Why not?  it's going to be a big balagan isn't it?

-bm

[thezerg]

Worked, thx!

When I create a colored coin (it gave me an error BTW), how is my description (read contract) and other info about the coin stored on the blockchain?

I don't believe the description is stored in the blockchain for privacy reasons--there is no need to make information about the colored coins public (other than the fact that they exist).  I think the idea is that open-assets is simply an accounting protocol.  It makes no attempt to enforce or make transparent the promises made by the issuer.

(BTW--I think Coinprism is pulling the information you see about WTK from a URL.)

I think storing a hash of the description in the coin type creation block is very important.  Its how you would take the issuer to court if s/he breaks the contract.

I know its probably not in the client yet, but WRT the protocol, can I send a small amount of BTC to every address that holds my coin (think interest payment)?

I believe colored coins and normal bitcoins can coincide at the same address and I think this was done for the reason you said (so that interest or dividends could be issued directly to the address where the colored-coins are held).  

Great!

[Peter R]

many things could happen.  I know for certain the transactions won't be cheap, the miners need an incentive to carry them.  If we continue to have more mining monopolization, then they could hold these networks hostage and charge exorbitant fees.  My primary concern though is if Bitcoin can even handle this sort of thing.  The technology is buckling on the current capacity, now were about to multiply it by 1000?  

the COIN_DUST limit was created to keep trivial transactions off the network, and the response was to hover just about the COIN_DUST limit?  so the devs will just raise it again, pumping more money into the miners.  Why not?  it's going to be a big balagan isn't it?

If you are going to make a statement like "the technology is buckling on the current capacity," you should back it up with some evidence.  

The entire blockchain fits on the tip of a finger with enough space (46 GB free, 18 GB used) to grow for another 1-3 years.  




Blocks aren't close to being full (and the limit can be raised), bandwidth requirements are acceptable, there are a sufficient number of nodes, etc.  The most unhealthy thing about the network in my opinion is simply the concentration of mining pools.

[Peter R]

When I create a colored coin (it gave me an error BTW), how is my description (read contract) and other info about the coin stored on the blockchain?

I don't believe the description is stored in the blockchain for privacy reasons--there is no need to make information about the colored coins public (other than the fact that they exist).  I think the idea is that open-assets is simply an accounting protocol.  It makes no attempt to enforce or make transparent the promises made by the issuer.

(BTW--I think Coinprism is pulling the information you see about WTK from a URL.)

I think storing a hash of the description in the coin type creation block is very important.  Its how you would take the issuer to court if s/he breaks the contract.

I am not an expert myself, so perhaps this is the case.  The protocol is described here: https://github.com/OpenAssets/open-assets-protocol/blob/master/specification.mediawiki

Whether this would be a positive or a negative I guess it depends on your view of the role of the protocol.  I understand your concern, but could you not argue that the issuer could just sign the hash of some legal document (with the key he used to create the colored coins) and then time stamp this in the blockchain (or something along these lines)?  It seems to me this could be done only when and as required (rather than forcing it on top of the protocol).

[Ron~Popeil]

1LK9UZ6ktgxFXZbpwdNVnS3VsF4yzetF4C

My colored coins address for WTK if you have any left. Thanks!
 

[Peter R]

1LK9UZ6ktgxFXZbpwdNVnS3VsF4yzetF4C

My colored coins address for WTK if you have any left. Thanks!
 

One worthless token has been sent to 1LK9UZ6ktgxFXZbpwdNVnS3VsF4yzetF4C 

[Ron~Popeil]

Thanks! I have one of ten in existence. I vow to exploit this coin to the fullest extent. 

[ABitNut]

I have a flat fee contract for my facility so for mining my only (added) cost would be buying mining hardware. So I could generate a color coin to collect capital allowing me to buy a miner, then mine coins and use the revenue from mining to back up the colored coins I gave out?

That sounds like a very interesting way to get me started up as a miner. It sounds far too easy actually. What is the catch?


By the way, if there are still worthless tokens left I created an address as well: 1CcGUZuYwy8okr5hZeLkytwwdFsNwpGC9H I have a feeling these coins will be in high demand in the future 

[Peter R]

By the way, if there are still worthless tokens left I created an address as well: 1CcGUZuYwy8okr5hZeLkytwwdFsNwpGC9H I have a feeling these coins will be in high demand in the future 

One worthless token (1 WTK) sent to 1CcGUZuYwy8okr5hZeLkytwwdFsNwpGC9H!

I have a flat fee contract for my facility so for mining my only (added) cost would be buying mining hardware. So I could generate a color coin to collect capital allowing me to buy a miner, then mine coins and use the revenue from mining to back up the colored coins I gave out?

That sounds like a very interesting way to get me started up as a miner. It sounds far too easy actually. What is the catch?

Yes, that is one of the exciting uses for colored coins.  An entrepreneur could raise money to finance the purchase of equipment, and then use the revenue generated from that equipment to pay interest to his bond holders, or dividends to his stock holders (depending on how he sets up the colored coins).

The catch is just that people might not trust an issuer of colored coins enough to actually buy them!  The issuer has to earn investors trust somehow.  Perhaps he could start a thread that describes his ideas with high-quality posts, and then just try to raise a small amount of funds at first.  If he deliver on his promises and his bond holders or stock holders make a good ROI, they might invest more on his next larger project.  Next thing you know, he may be able to attract large amounts of funding.  By this time, it would be unlikely he'd ever want to screw over his investors even if he could get away with it because he'd ruin all his hard work building up his reputation and lose his ability to raise funds in the future (in addition to opening himself up to potential litigation). 

[bish5555]

@bish5555 and @iraszl

I sent each of you one worthless token (1 WTC).  I only have 8 left because I only issued 10.  So these things are rare lol  




I didn't notice that there is a drop-down menu in the "Amount" field on the "Send Coins" tab.  This is where you can switch from BTC to the various colored coins.

If anyone else wants a worthless token, get a Coinprism wallet, post your address, and I'll send you one. 

Great got my ultra rare WTK muwhahaha!!

[drawingthesun]

These asset exchanges are fascinating, but remember that you still have a single point of trust, the issuer.

An interesting future using either Bitcoin Script, Nxt's Automated transactions or Ethereum's contracts is building simple business logic and then issuing shares for a trustless organization.

Obviously not every company can become a trustless organization, but there are some examples where this is perhaps possible.

Imagine a dice site implemented as a turing complete contract (Nxt AE or Ethereum contract), the shares are issued on one of these distributed exchanges (Coloured coins/Nxt AE) are used to raise funds and the issuer is the automated contract. The contract/dice site then runs the game logic over the chain and all profits are dealt out to the shareholders via the trustless company.

I think this is a bright future, we just need to think outside the box.