IOTA Colored Coins implemented in GoShimmer – Why it is bullish

  • The development of IOTA 1.5 continues to make great strides; yesterday, the IOTA Foundation added Colored Coins on GitHub to GoShimmer.
  • The new feature coming with Chrysalis (phase 2) may have a massive impact on the IOTA price if widely adopted.

With the first component for IOTA 1.5, the Hornet node, released a few days ago, the release of Chrysalis is within reach. As CNF reported, IOTA 1.5 aims to make major improvements to the IOTA Tangle to make the technology ready for enterprise use even before Coordicide is released.

The launch of Chrysalis is a step-by-step process in 2 phases. The first phase is expected to be implemented by the beginning of July and will include improved tip selection, milestone selection, white flag and autopeering. The second phase will be even more exciting when the new UTXO model, atomic transactions, reusable addresses (Ed25519), higher hardware support for all major architectures through more standard cryptography (EdDSA) and new features such as Colored Coins will be introduced by the end of October.

For the latter, another important milestone was reached yesterday. Hans Moog, developer at the IOTA Foundation, has committed the support for Colored Coins on GitHub to GoShimmer.

colored token iota

Why Colored Coins are a massively bullish for the IOTA price

The IOTA Colored Coins (ICC) will be integrated in the second phase of Chrysalis, so development seems to be on schedule. The ICCs are earmarked coins that can represent real-world assets in a tamper-proof way, based on the IOTA Tangle. Simply put, IOTA Colored Coins work in the way that an existing IOTA token is assigned to an object by means of “coloring”, i.e. a marking in the hash.

The IOTA token will be used as a carrier, which can have a different meaning in certain contexts and can be given a higher value, for example by marking it. The ICC is created by the owner of the IOTA token via a value transfer application, which gives the IOTA its new “coloring” and its new value.

The ICCs can tamper-proof represent any type of asset and ownership, such as a deed of ownership, land, admission ticket, stocks, corporate bonds or other real world financial products based on the IOTA Tangle. In addition, e-votings could also be realized via Colored Token. The ticket validation machine or the “dispenser” of a ballot could, for example, remove the “coloring” of the token and turn it back into a “normal” IOTA token.

In contrast to the ERC20 tokens from Ethereum there is a massive difference. As explained above, potential users have to buy the IOTA token to use Colored Coins. The introduction of IOTA Colored Coins could therefore lead to a shortage of IOTA Tokens and consequently drive the IOTA price upwards.

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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