Litecoin wallet FAQ

Colored coins allow issuers to add an additional layer of value to bitcoins in a rainbow of different ways. Colored coins are part of an Open Assets Protocol, which means you can attach an additional value to bitcoins. If you want to be able to carry a stable amount of cash with you, but with the simplicity of transactions that Bitcoin offers, now you can. You can now have a colored coin equal one dollar, euro, pound… Since colored coins tie an additional value to Bitcoin, governments or banks can issue Colored Coins that represent represent fiat currencies, thus using the Bitcoin protocol to send payments globally.

Most people think of Bitcoin as a currency; however, Bitcoin is more like a platform for a financial ecosystem. Colored coins demonstrates the capabilities Bitcoin and how it is far more than a currency.

The digital “coloring” of Bitcoins is more like “marking” them for other uses. Colored coins’ open assets protocol operates on top of the Bitcoin protocol, which enables users to mark Bitcoins as tokens for a variety of uses and assets. One can also use a colored coin as a key, so only the person with the wallet containing it can open files, accounts or even a car door.

This development has weakened the argument for a lot of AltCoins as there will no longer be a need for coins that have only specific uses. For example, PizzaCoin, you will not be needed because Domino’s can simply color Bitcoins and have a satoshi equal a pizza voucher and send it to thousands of wallets at a cheaper cost. Carrying coupons just got a lot easier too. You will not forget them at home, as long as you have your phone. Effective and efficient distribution of promotions at it’s cryptographic finest.

When I first heard about colored coins, I was excited about the idea but wondered how it would come into fruition. Now that CoinPrism’s wallet for colored coins is out, I decided to give it a try.

CoinPrism: Simplicity with a few kinks
Immediately I could tell I would not need a tutorial to use this client. I went straight into creating my own colored coin. You simply name the coin, choose the ticker, choose the issuer name, a picture, a description, divisibility and asset type.