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Author Topic: value of a colored coin  (Read 2792 times)

coiner

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value of a colored coin
« on: May 14, 2014, 09:20:30 pm »
Am I understanding it correct that the value of a new colored coin is backed by the amount of bitcoins I am willing to pay for the colored coin?

markcross

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Re: value of a colored coin
« Reply #1 on: May 14, 2014, 11:27:36 pm »
Am I understanding it correct that the value of a new colored coin is backed by the amount of bitcoins I am willing to pay for the colored coin?

I haven't created any yet.... but I am guessing you transfer btc to your account.

Then create a colored coin and apportion a fraction of a btc you have on account to the colored coin you are minting.

I get this inference from the FAQ:
http://coloredcoins.org/about/faqs/

Personally I have found the FAQ and documentation and lack of worked examples a bit of a challenge. But I think in a few days tonnes of people will pile in here :-)

Cheers Mark (Puzzled as you are)

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Are colored coins tied directly to particular Bitcoins?

Bitcoins do not have an individual existence.  A transaction has a set of inputs, and a set of outputs.  The sum of the inputs = the sum of the outputs + the transaction fee.  But nothing about that statement indicates which input goes out on which output.  So a colored coin cannot be tied to a particular Bitcoin.

Most colored coin algorithms define a way to map the input Bitcoins to the outputs.  Then we can tie colored coins to particular Bitcoins, but the flow of Bitcoins from outputs to inputs isn’t defined by Bitcoin, but the colored coin algorithm.

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.

The favored method of calculating Bitcoin Balances maintains a fixed ratio of Bitcoin to colored coin on transaction outputs.  Other methods do not.

btc.blue

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Re: value of a colored coin
« Reply #2 on: May 15, 2014, 12:28:34 am »
Am I understanding it correct that the value of a new colored coin is backed by the amount of bitcoins I am willing to pay for the colored coin?

Currently the blue ones are selling for $400 but you can get them 20% off if you use coupon code: "Blue20"
http://btc.blue/?product=collectible-blue-colored-bitcoins

coiner

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Re: value of a colored coin
« Reply #3 on: May 15, 2014, 06:35:54 am »
@markcross
Thanks for helping out. I am trying to figure out how those colored coins can be used.

@btc.blue
I see that you created the blue colored coins "https://www.coinprism.com/blockchain/color/3LbSDb9GBNpWT5K6uQTc9RAtwZZCx8Qo3r". Why doesn't it show by how many bitcoins they are backed and how many blue coins you generated?

markcross

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Re: value of a colored coin
« Reply #4 on: May 15, 2014, 07:25:22 am »
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@btc.blue
I see that you created the blue colored coins "https://www.coinprism.com/blockchain/color/3LbSDb9GBNpWT5K6uQTc9RAtwZZCx8Qo3r". Why doesn't it show by how many bitcoins they are backed and how many blue coins you generated?

And a timestamp?

btc.blue

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Re: value of a colored coin
« Reply #5 on: May 15, 2014, 05:43:54 pm »
I think it doesn't show the total amount because I could always issue more. A timestamp would be nice but that would have to be included 3rd party software probably. The coins I sell are issued as they are bought so if only one person buy a coin such as blue coin they will be the only holder and have the rarest coin.

Dance76

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Re: value of a colored coin
« Reply #6 on: May 17, 2014, 02:40:26 pm »
Am I understanding it correct that the value of a new colored coin is backed by the amount of bitcoins I am willing to pay for the colored coin?

I'm fairly new to this too - but they're not necessarily backed by anything. The user interface is a little confusing at first as when you create a colour, it doesn't seem to 'do anything' or appear in your asset list. You need to send a minimal amount of BTC to cover transactions - I sent about 10 cents worth to create millions of Nigerian Scam Coins

So in short - these coins are only as good or as valuable as your trust in the person issuing them. Unlike Bitcoins, there's nothing to stop me issuing a lot more Nigerian Scam Coins when I want to.
Coinprism 1EuhLUGqdzEEAT4irLP2MZyZ7zEPoPmE4G - send any  coin to this address for valuable Nigerian Scam Coin.

ma7as

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Re: value of a colored coin
« Reply #7 on: May 19, 2014, 06:39:38 pm »
What's de deal with blue bitcoins? Why it's so rare? I could copy the img and create a new blue bitcoin, same img, same name, same description, just color address may change.

Dance76

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Re: value of a colored coin
« Reply #8 on: May 19, 2014, 09:11:50 pm »
What's de deal with blue bitcoins? Why it's so rare? I could copy the img and create a new blue bitcoin, same img, same name, same description, just color address may change.

You are 100% correct. At the moment, the majority of colored coins are created by people experimenting with the technology.

There is a good thread on their potential here - https://bitcointalk.org/index.php?topic=608067.0
Coinprism 1EuhLUGqdzEEAT4irLP2MZyZ7zEPoPmE4G - send any  coin to this address for valuable Nigerian Scam Coin.

Coinprism

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Re: value of a colored coin
« Reply #9 on: May 20, 2014, 09:59:05 pm »
What's de deal with blue bitcoins? Why it's so rare? I could copy the img and create a new blue bitcoin, same img, same name, same description, just color address may change.

The color address is the only thing cryptographically secure, which means it cannot be counterfeited. We plan to add a way to verify an issuer through the SSL infrastructure. We will have more to announce about this later.