@ -29,11 +29,11 @@ Meta-coins and meta-chains are software layers implemented on top of bitcoin, ei
==== Colored Coins
Colored Coins is a meta-protocol that overlays information on small amounts of bitcoin. A "colored" coin is an amount of bitcoin repurposed to express another asset. Imagine for example taking a $1 USD note and putting a stamp on it that said "This is a 1 share certificate of Acme Inc.". Now the $1 serves two purposes: it is a currency note and also a share certificate. Because it is more valuable as a share, you would not want to use it to buy candy, so effectively it is no longer useful as currency. Colored coins work in a same way by converting a specific, very small, amount of bitcoin into a traded certificate that represents another asset. The term "color" refers to the idea of giving special meaning through the addition of an attribute such as a color - it is a metaphor not an actual color association. There are no colors in colored coins.
Colored Coins is a meta-protocol that overlays information on small amounts of bitcoin. A "colored" coin is an amount of bitcoin repurposed to express another asset. Imagine for example taking a $1 USD note and putting a stamp on it that said "This is a 1 share certificate of Acme Inc.". Now the $1 serves two purposes: it is a currency note and also a share certificate. Because it is more valuable as a share, you would not want to use it to buy candy, so effectively it is no longer useful as currency. Colored coins work in the same way by converting a specific, very small, amount of bitcoin into a traded certificate that represents another asset. The term "color" refers to the idea of giving special meaning through the addition of an attribute such as a color - it is a metaphor not an actual color association. There are no colors in colored coins.
Colored coins are managed by specialized "wallets" that record and interpret the metadata attached to the "colored" bitcoins. Using such a wallet, the user will convert an amount of bitcoins from uncolored currency, into colored coins, by adding a label that has a special meaning. For example, a label could represent stock certificates, coupons, real property, commodities, collectible tokens, etc. It is entirely up to the users of colored coins to assign and interpret the meaning of the "color" associated with specific coins. To color the coins, the user defines the associated metadata, such as the type of issuance, whether it can be subdivided into smaller units, a symbol and description, and other related information. Once colored, these coins can be bought and sold, subdivided, aggregated and receive dividend payments. The colored coins can also be "uncolored" to remove the special association and redeem them for their face-value in bitcoin.
Colored coins are managed by specialized "wallets" that record and interpret the metadata attached to the "colored" bitcoins. Using such a wallet, the user will convert an amount of bitcoins from uncolored currency, into colored coins, by adding a label that has a special meaning. For example, a label could represent stock certificates, coupons, real property, commodities, collectible tokens, etc. It is entirely up to the users of colored coins to assign and interpret the meaning of the "color" associated with specific coins. To color the coins, the user defines the associated metadata, such as the type of issuance, whether it can be subdivided into smaller units, a symbol and description, and other related information. Once colored, these coins can be bought and sold, subdivided, aggregated and receive dividend payments. The colored coins can also be "uncolored" by removing the special association and redeem them for their face-value in bitcoin.
To demonstrate the use of colored coins, we have created a set of 20 colored coins with symbol "MasterBTC" that represent coupons for a free copy of this book. Each unit of MasterBTC is represented by these colored coins can now be sold or given to any bitcoin user with a colored-coin-capable wallet, who can then transfer them to others or redeem them with the issuer for a free copy of the book. This example of colored coins can be seen here: https://cpr.sm/FoykwrH6UY
To demonstrate the use of colored coins, we have created a set of 20 colored coins with symbol "MasterBTC" that represent coupons for a free copy of this book. Each unit of MasterBTC, represented by these colored coins, can now be sold or given to any bitcoin user with a colored-coin-capable wallet, who can then transfer them to others or redeem them with the issuer for a free copy of the book. This example of colored coins can be seen here: https://cpr.sm/FoykwrH6UY
.The metadata profile of the colored coins recorded as a coupon for a free copy of the book
====
@ -119,7 +119,7 @@ Bitcoin has a few monetary parameters that give it distinctive characteristics o
*Litecoin*
One of the first alt-coins, released in 2011, Litecoin is the second most successful digital currency after bitcoin. It's primary innovations were the use of _scrypt_ as the Proof-of-Work algorithm (inherited from Tenebrix) and the faster/lighter currency parameters.
One of the first alt-coins, released in 2011, Litecoin is the second most successful digital currency after bitcoin. Its primary innovations were the use of _scrypt_ as the Proof-of-Work algorithm (inherited from Tenebrix) and the faster/lighter currency parameters.
* Block generation time: 2.5 minutes
* Total currency: 84 million coins by 2140
@ -137,7 +137,7 @@ Dogecoin was released in December of 2013, based on a fork of Litecoin. Dogecoin
*Freicoin*
Freicoin was introduced in July 2012. It is a _demurrage currency_, meaning that is has a negative interest rate for stored value. Value stored in Freicoin is assessed a 4.5% APR fee, to encourage consumption and discourage hoarding of money. Freicoin is notable in that it implements a monetary policy that is the exact opposite of Bitcoin's deflationary policy. Freicoin has not seen success as a currency, but is an interesting example of the variety of monetary policies that can be expressed by alt-coins.
Freicoin was introduced in July 2012. It is a _demurrage currency_, meaning that it has a negative interest rate for stored value. Value stored in Freicoin is assessed a 4.5% APR fee, to encourage consumption and discourage hoarding of money. Freicoin is notable in that it implements a monetary policy that is the exact opposite of Bitcoin's deflationary policy. Freicoin has not seen success as a currency, but is an interesting example of the variety of monetary policies that can be expressed by alt-coins.
* Block generation: 10 minutes
* Total currency: 100 million coins by 2140
@ -335,7 +335,7 @@ Namecoin registrations need to be updated every 36,000 blocks (approximately 200
==== Bitmessage
Bitmessage is a bitcoin alt-chain that implements a de-centralized secure messaging service, essentially a server-less encrypted email system. Bitmessage allows users to compose and send message to each other, using a bitmessage address. The messages operate in much the same way as a bitcoin transaction, but they are transient - they do not persist beyond 2 days and if not delivered to the destination node in that time, they are lost. Senders and recipients are pseudonymous, they have no identifiers other than a bitmessage address, but are strongly authenticated, meaning that messages cannot be "spoofed". Bitmessages are encrypted to the recipient and therefore the bitmessage network is resistant to holistic surveillance - an eavesdropper has to compromise the recipient's device in order to intercept messages.
Bitmessage is a bitcoin alt-chain that implements a de-centralized secure messaging service, essentially a server-less encrypted email system. Bitmessage allows users to compose and send messages to each other, using a bitmessage address. The messages operate in much the same way as a bitcoin transaction, but they are transient - they do not persist beyond 2 days and if not delivered to the destination node in that time, they are lost. Senders and recipients are pseudonymous, they have no identifiers other than a bitmessage address, but are strongly authenticated, meaning that messages cannot be "spoofed". Bitmessages are encrypted to the recipient and therefore the bitmessage network is resistant to holistic surveillance - an eavesdropper has to compromise the recipient's device in order to intercept messages.
Minh T. Nguyen
10 years ago