New Colored Coins Implementation Released After Standard Drive Abandoned

(@pete_rizzo_) | Published on June 24, 2015 at 11:11 GMT
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Colored Coins

Though by far the most visible, the recent debate over bitcoin's maximum block size isn't the only area where the technology's decentralized decision-making processes can result in impediments to further development.

The colored coins community, for example, recently attempted to consolidate its efforts in a bid to encourage more developers to use the bitcoin blockchain as a vehicle for asset transfer. However, the attempt to merge the best of the sector's offerings to support this goal, started in late 2014, has ended without consensus.

As a result, ColoredCoins.org today released a new implementation of the colored coins protocol, one it believes can best fulfill use cases for the technology as it becomes increasingly of interest to banks and major financial institutions.

Created by ColoredCoins.org, with support from venture-backed colored coins startup Colu, the implementation uses torrents to allow for more information to be stored in colored coin metadata, comes smart contract compatible and features zero confirmation and single payment verification (SPV) wallet support.

Despite the issues in its creation, however, Colu CTO Rotem Lev believes that the effort will do much to create strong, open-source resources that he hopes will smooth future development as enterprise-level interest in bitcoin grows.

As for how well the colored coins protocol can appeal to these institutions remains to be seen, as the effort didn't succeed at making existing players in the colored coin space – ChromaWay, CoinPrism and CoinSpark – interoperable, despite the process beginning with such goals. This means certain wallets issued by one provider, for instance, won't be able to read colored coins from other wallets.

Still, Lev believes that the implementation is a step in the right direction. Even though four versions of colored coins still remain, the improved website, he believes, will attract interest to the sector of the bitcoin community and its higher goals.

Lev told CoinDesk:

"We tried to make the other implementations better, we still are. Despite all the problems, it's still the [2.0] protocol that keeps you the closest to bitcoin and you can do everything 100% decentralized, which is the most important for us."

Debate spoils standard

Though generally supported by most members of the ecosystem, the drive toward standardization was spearheaded by ColoredCoins.org director Amos Meiri, who is also the co-founder and CEO of Colu.

Colu's mandate, according to Lev, is to work on blockchain development more broadly. To achieve this goal, it sought to develop the colored coins protocol, a mission that necessitated the support of other members of the ecosystem.

But despite communication efforts, Lev indicated that conversation soon spiraled into a "huge war", with different participants unwilling to make changes to the standard that may compromise certain business advantages.

"One of the players in the space, they wanted complete intellectual property (IP) over anything we would do together," Lev continued. "If we decide we want to use that technology in a company, it has to be completely open-source. It was kind of a mess."

Alleged conflicts

Evidence of the debate is still visible in public forums frequented by companies in the sector, which detail how ChromaWay CTO Alex Mizrahi withdrew from the ColoredCoins.org board of directors in May.

One issue, according to those who pulled support for the initiative, was the way in which communication was managed during the process.

"Colu was supposed to organize a collaborative effort on a new standard, and invite us and other companies, but instead developed it all by itself and shared no information in the process, so there was no standardization effort so to speak," Mizrahi told CoinDesk.

Others like CoinSpark developer Gideon Greenspan called the effort a "missed opportunity", but suggested he supported increased interoperability between teams.

Greenspan went on to suggest that the ColoredCoins.org team is perhaps too close to Colu, adding: "They decided to create their own protocol. There's a potential conflict here, because ColoredCoins.org is neutral territory, but it's under their control."

Still, Lev countered such assertions.

"I worked on ColoredCoins.org before Colu and I am passionate about it, we want to make it open source so it could be used by anyone," he said. "The only difference is that Colu was funded to a larger scale and invested in core developers developing the protocol."

New community resources

colored coins

That's not to say that certain new features won't be available to all those in the ecosystem.

The ColoredCoins.org website, for example, will include all the implementations that request to use the resource, with the exception of ChromaWay, which has insisted that its be removed.

Also available will be an asset-aware block explorer that will track the number of colored coins assets currently in the marketplace.

Additionally, the Colu Colored Coins implementation will go live with extended documentation on API endpoints and detailed overviews for how developers can create testnet addresses, issue assets and transfer assets.

Drive toward adoption

Despite the issues that remain, Colu board member and eToro CEO Yoni Assia expressed his hope that the effort would improve the technology he helped to theorize.

For example, he said that by using torrents, colored coins will now be able to handle more complex transactions and more data in a decentralized environment.

"When you think about colored coins, one of the core ideas that emerged is the concept of decentralized exchange," he said. "A lot of the thought process was about, how do you create the out-of-the-box potential to do exchange."

Assia expressed his hope that the colored coins sector would continue to come together to create more shared resources, especially as he believes the bitcoin protocol will need to be further optimized for asset exchange in order to attract banks and other institutions.

Lev suggested that this process wouldn't like take place overnight.

He concluded:

"Banks don't care if one developer made it in his garage, you have to have bigger adoption, a bigger source base and that's where we're trying to get colored coins to."

Images via ColoredCoins.org

ChromawalletCoinprismCoinSparkColored CoinsCrypto 2.0

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