Bitcoin's Lightning Network could be made compatible with digital assets

posted over 2 years ago
Blockchain startup Colu has unveiled a demo of how Lightning could be made compatible with colored coins (a technology that enables small amounts of bitcoin to represent other assets, such as the US dollar, stocks, or even houses or cars). Mashing this concept together with Lightning could mean more of these transfers at a higher speed.

Users can now send test transactions over the so-called "off-chain" network using Colu's demo, which perhaps offers the first user-experience for a Lightning Network project. The team worked with the startup Lightning Labs, tweaking its existing code to make it compatible with colored coins.

Colu VP of product Mark Smargon said that he thinks that this functionality could help solve one of colored coins' bigger problems, while conceding that it might not be necessary for every use case.

He argues that the low-hanging fruit for this functionality is local currencies, a use case that has become a big focus for Colu, which raised nearly $10m earlier this year in its bid to narrow its focus from colored coins more broadly.
Tags: bitcoin, opinion