Author: Flavien Charlon 2014-04-06 20:59:34
Published on: 2014-04-06T20:59:34+00:00
Flavien, lead developer of Coinprism, has written a specification document that describes the colored coins protocol being used in the new colored coins web wallet. The protocol marks transactions either as issuance or transfer transactions by using an OP_RETURN output with a 9 bytes marker and uses the value of an output as the colored value. Flavien is looking for feedback and discussions regarding the protocol before moving from TestNet to MainNet. The colored coin protocol is layered on top of the existing Bitcoin protocol and requires no modification of the existing protocol, making it usable today. However, SPV is not as efficient since the client needs to backtrack up to the issuing transaction to find the color of an output. An alternative approach would have been to completely disconnect the colored value and the real BTC value and encode the colored value of each output in an OP_RETURN output. However, this approach only works with a limited number of outputs given that there are only 40 bytes. Additionally, it could lead to people spamming the network with very small outputs containing an arbitrary number of colored coins.Flavien believes that the approach they are using, where the colored value equals the actual value of the output, is the right one. However, it can be slightly inconvenient when issuing a large number of shares as it requires a significant amount of capital.
Updated on: 2023-06-08T18:31:59.880058+00:00