Coinprism is the first colored-coins Bitcoin wallet. They offer the ability to prove ownership of stocks, bonds, commodities, smart property and more by “coloring” bitcoins with the Open Assets protocol. Now you can store those colored coins with Armory, which is the only open-source wallet that supports both multisignature transactions and cold storage.
As Coinprism’s announcement explains, their wallet “is already extremely secure, as the private keys never leave the browser,” but cold storage is the next step for valuable property. Many of us can’t be completely sure that our personal computers don’t have spyware on them, so cold storage is the only way to know that our coins are safe from thieves and spies.
Flavien Charlon, founder and CEO of Coinprism, talked to CoinTelegraph about what’s trending in colored coins, the future of smart property and why he chose Armory to provide Coinprism’s cold storage feature.
Flavien Charlon: Most of the colored coin assets we are seeing at the moment are crowdsale tokens. For instance Klippt is an Australian hair salon who used colored coins for raising money to open a new store.
Often, people want to hold their crowdsale tokens over the long term and want to be able to store them securely offline. This is why Armory support is great for these types of uses.
CT: What does the future of smart property look like to you?
FC: Today's use cases of smart properties are quite one-dimensional, but there are many interesting ways in which smart properties can be combined with existing services.
“Users won't necessarily have to know they are using the blockchain, but the technology will be leveraged as an infrastructure.”
CT: Why did Coinprism choose Armory to provide their cold storage offering?
FC: Armory is free and open source, has a large range of options, and doesn't require any kind of specialized hardware. It can make various kinds of paper backups, such as encrypted backups and N of M backups. Today it's the second most-used desktop wallet after Bitcoin-Qt. That being said, we do plan to add support for more offline storage providers over time.
CT: The process of generating Armory cold storage addresses still looks a little technical. Do you foresee the process becoming more layperson-friendly in the future?
FC: The process is cumbersome because of the fact that it requires a separate offline machine. There is some room for improvement for the Armory offline-user experience, but I think overall we are moving towards hardware storage.
Trezor was one of the first in that space, and more companies are now appearing with their own products. They provide secure storage to the same level as Armory (sometimes better), and have the benefit of being much easier to use.
CT: What do you think will trigger people to move away from the old model of ownership—that is, registering titles with governments—to representing ownership of assets on blockchains instead?
FC: It depends a lot on the type of use case. Things that require enforceability by the legal system, such as house deeds, don't seem very promising to me because it will take a long time for courts to recognize these.
“You don’t always need legal enforceability.”
But you don't always need legal enforceability. For instance, diamonds have a unique fingerprint that can be revealed by shining a laser through [them]. Colored coins could be used to record ownership of precious stones, in an unofficial way at first, but that would immediately allow buyers to verify that a stone hasn't been stolen, by asking the seller to sign a message to prove they own the related colored coin (and therefore acquired it legitimately).
CT: How does the ability for anyone to issue colored coins affect entry barriers to stock issuance and business transactions?
FC: Stock issuance is a thorny question, and is heavily regulated in most jurisdictions. But assuming companies raising money ensure they have the right legal setup, the entry barrier is almost eliminated.
The existing tools allow companies to raise money with very minimal fees, and in a short amount of time. The legal costs and hurdles unfortunately remain. There are a few ways to work around equity regulations, by crowdfunding [for] donations (essentially what Ethereum did) or [through] debt.
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As Coinprism’s announcement explains, their wallet “is already extremely secure, as the private keys never leave the browser,” but cold […]