A slew of services have emerged in recent months that allow bitcoin enthusiasts the ability to use bitcoin and other digital currencies to create tradeable assets.
Though mostly used by curious technologists today, platforms like Counterparty and NXT allow users to create a set supply of digital assets, tokens that could then be sold to raise funds for a book, event or entrepreneurial endeavor, without requiring a dedicated blockchain and the associated maintenance an altcoin would.
What these systems lack, according to the developer behind crypto 2.0 services provider CoinDaddy, Jeremy “J-Dog” Johnson, is a location where these assets can be traded easily, a central database that allows users to tie information to assets and prove their authenticity.
For example, CoinDaddy launched what it calls its WHOIS for assets this week, a blockchain version of the query and response protocols that allow anyone to look up the identities of those who own domain names and Internet assets.
Johnson indicated that this service is part of a larger series of releases that can be compared to structures more than products in that they form the foundation of what he believes will be a robust service that can facilitate digital asset commerce.
He told CoinDesk:
“One of the huge problems we’re already seeing is scammers. You can create ‘petercoin’ and I could create ‘peterscoin’, and no one knows whose coin it is. The only way we get to which is the right one is some type of feedback system.”
Johnson sees CoinDaddy as a step in the direction of such a service, one that includes a number of features that improve the trading of assets on Counterparty and Dogeparty, its two supported protocols.
Features for commerce
CoinDaddy offers an array of features that aim to support asset buyers and sellers.
An early dogecoin miner, Johnson said he was drawn to the concept of digital assets by the project Dogeparty, which built an asset transfer layer on top of the dogecoin protocol. “That was the initial idea behind the site, for me to be able to list my assets,” Johnson said.
To begin, there is its Asset Registration service, where users can register their assets by creating a wallet, naming an asset and provide basic information about that asset.
Asset Enhancement allows you to provide a more advanced description of an asset, enhancing it with website information, categories, social media logins and more.
“The idea behind it here is making it easy to associate information with their assets and tie company names and websites and try to establish that link,” Johnson said, contrasting it with previous versions that were short on actionable information.
For security, CoinDaddy requires registrants to provide proof-of-ownership deposit, meaning new applications need to make a “tiny” deposit from an address they claim to own to a CoinDaddy address. Once validated, CoinDaddy retains the deposit.
Spreading the word
In addition to improving the listing quality, CoinDaddy features a number of tools that allow users to make this information more discoverable.
For example, while users can already send out broadcasts on Counterparty or Dogeparty, a process by which users make announcements visible to others in protocol explorers, these messages are limited to a certain number of characters.
Broadcast Enhancement, in turn, allows users to connect information to broadcasts, potentially reaching others interested in the asset.
In the above example, the message is also paired with a unique website that serves as an extended explanation of the CoinDaddy asset.
“Users can choose to use our custom website tools, or they can choose to just use our enhancement tool and point the asset or broadcast at their own website,” Johnson explained.
A similar asset transfer and escrow service then helps facilitate commerce between buyers, keeping funds secure on the blockchain until buyers release funds to the seller.
Building blocks
In interview, Johnson sought to paint these features as building blocks, ones that could be developed as the asset transfer ecosystem matures.
For example, he suggested that CoinDaddy will seek to build out a reputation management system to create a “whole feedback system for assets”.
“If someone gets scammed, they can put feedback into our system with our API. Also, if someone tried to do a transaction, we could say if this person is reputable,” Johnson explained.
Free to use already are CoinDaddy’s block explorers, which visualize assets on the Counterparty and Dogeparty protocols. Owning the services provides CoinDaddy with a way to better tap into what its customer base may want as it seeks to expand.
“By controlling the blockchain viewer sites, we can more easily integrate features into the blockchain viewer and get them out to the masses faster,” Johnson said.
The Asset WHOIS will be aimed at serious buyers and sellers of digital assets, while hopefully enabling those who may be experimenting with the tech to access these users.
Encouraging real use
Overall, Johnson expressed his hope that CoinDaddy becomes a useful tool for those experimenting with the technology, but he acknowledged that new technologies often attract abuse or suffer from a lack of creativity.
“There are a few projects that are starting to use assets, but the system was meant for people to use assets for anything, like starting an ‘allowance coin’ for parents. Nobody’s building exciting apps like that, that’s where I would like to see it,” he said.
He also noted that the Asset WHOIS service could help enable “squatters” who want to hold on to potentially valuable asset names on the belief they may rise in value like web domains. One advantage is that asset names only require a one-time registration fee.
As for monetizing the service, CoinDaddy is structured to encourage use.
CoinDaddy charges a flat $5 fee for each element of its service – registration, asset enhancement and broadcast enhancement, payable in bitcoin, litecoin or dogecoin, as part of what it calls its “Fair Pricing Policy”.
Buy and sell image via Shutterstock