A not too technical introduction to colored coins (and about using Bitcoin as a platform). As held at the Bitcoin Startups Berlin Meetup at betahaus

1. A not too technical
introduction to colored coins
and using Bitcoin as a platform.
www.qllector.com - hubert@gert.is

2. ?
what is it
anyway

3. ?
what is it
anyway

4. 1
a currency
●
●
●
●
crypto currency
decentralized
deflationary
fiat

5. so what?
Troll!!
@*%XXX
1
a currency
Me feels A bit
volatile t’day.
Fiat
money without
intrinsic value.
●
●
●
●
crypto currency
decentralized
deflationary
fiat

6. 2
asset/value store
●
●
●
●
crypto currency
decentralized
deflationary
fiat

7. 2
From bulb to
town house to
tulip to bulb ...
asset/value store
●
●
●
●
crypto currency
decentralized
deflationary
fiat

8. 3
a platform
●
●
crypto currency
decentralized

9. a technology!
3
a software!
a platform
a network!
●
●
crypto currency
decentralized

10. Bitcoin is the
first plausible
proposal for
an economic
protocol for
the Internet
a technology!
3
a software!
a platform
a network!
●
●
crypto currency
decentralized

12. colored coins
http://coloredcoins.org/
http://www.youtube.com/watch?v=fmFjmvwPGKU

13. key points
White paper v2.0
The idea behind colored coins is to separate
the bitcoin network and its underlying
cryptographic technology from the bitcoin as
a currency unit and the surrounding
ecosystem, using the Bitcoin network
simply as a mechanism to securely send
transactions and avoid double spending.

14. I am the mighty
Bitcoin Network.
I am THE cool crypto currency.
I run on top of the mighty network.
(BTW, My name is Bitcoin as well.)
Protocol only is
just fine with me ...
I enable other crypto stuff
on top of the mighty network.
Me too!

15. key points
FAQ
Could an alternate colored coin be better for colored coins?
From an implementation point of view, certainly. An alternate
cryptocurrency could be specifically designed to transport colored
coin values.
However, Bitcoin has the largest hashing pools, which
means Bitcoin is more secure and reliable. An alternate
cryptocurrency would have very hard time providing the secure
and stable distributed computational network that Bitcoin
provides.

16. key points
FAQ
Are colored coins tied directly to particular Bitcoins?
Bitcoins do not have an individual existence ... a colored coin
cannot be tied to a particular Bitcoin.
Most generally, Color Coins only require an objective and
unambiguous method for calculating the colored coin
values available on the inputs of a transaction, and an
objective and unambiguous method for calculating the colored
coin content of each output on a transaction.

17. if input is
color coded ...
red
green
green
… then color
code output.

18. key points
White paper v2.0
In order to issue a new color,
one must release the coins of
that color by creating a ● Non-reissuable colors - in the nonreissuable case, the inputs are irrelevant; the
issuer will not have any power once the
genesis transaction.
transaction is issued, so all that matters is the
●
transaction itself (specifically, its outputs).
Reissuable colors - here, the issuer should
choose one secure address as an “issuing
address”, and set input 0 of the transaction to
come from that address. Later on, the issuer will
be able to issue more units of the color by
creating another genesis transaction with the
same address at input 0.

19. key points
FAQ
How are colored coin Coins
different from regular Bitcoins?
Bitcoins only represent Bitcoins, while colored coin
coins are used to represent other assets.
For example, a colored coin might represent a stock in a company,
or a gram of gold, or a US Dollar.
As long as one or more parties are willing to recognize the
backing of a colored coin, that particular colored coin can be used
to trade the underlying assets as easily as Bitcoin can be traded.

20. 1
2
legal
technical
else
some caveats

21. 1
legal
some caveats
Forex! Yikes!
stock exchanges:
Highly Regulated!
For example, a colored coin might represent a stock in a company,
or a gram of gold, or a US Dollar.
commodity trading:
Highly regulated!

22. 2
technical
some caveats

23. 3
else
● competing efforts
● internal squabbling
● differences with
Bitcoin core team (e.
g. dusting)
some caveats

25. http://coloredcoins.org/

26. thank you.
www.qllect.com
hubert@gert.is
@hubert