A new platform capable of transferring almost anything over bitcoin’s block chain is aiming to innovate on competing ‘2.0’ offerings from ChromaWallet, CoinPrism, Counterparty and MasterCoin.
CoinSpark, the first software tool available from Coin Sciences, seeks to provide an easy way for users to create and distribute digital assets.
The platform generates asset web pages and enforceable legal contracts for users automatically. Next, all units of the asset are sent to a lightweight wallet for Linux, Mac and Windows, which lives on the issuer’s computer, not a hosted web wallet.
The end result, according to Coin Sciences CEO and founder Gideon Greenspan, is a web-like approach to asset transfer that removes the need for end users’ wallets to store or review a large quantity of bitcoin transactions.
Greenspan told CoinDesk:
“We believe that bitcoin wallets should work just like your web browser – light on the client side, and enabling direct interaction with millions of different providers.”
Greenspan compared CoinSpark to a complex web application like Facebook, which allow users to interface with its many features without requiring ISPs to have a complete copy of the social network on their servers.
Key to this approach will be a unique property to CoinSpark called “asset independence” that allows the movements of one asset to be tracked across bitcoin transactions while effectively ignoring the movements of other assets.
Based in Tel Aviv, CoinSpark is the latest project for Greenspan, an established developer who has worked on a wide variety of web projects, including Web Sudoku, an online version of the popular puzzle game, and Cloudlook, a project that measures the performance of cloud servers.
Unlocking fiat’s digital potential
Following its launch, CoinSpark will compete against crypto 2.0 projects such as Counterparty and MasterCoin. The platform will let users trade bitcoin and other assets over the bitcoin block chain with direct peer-to-peer transactions.
On a technical level, Greenspan said this will simplify asset exchanges, which could be completed in a single bitcoin transaction, rather than being posted in one transaction and confirmed in another.
However, Greenspan suggested that CoinSpark will target more established issuers by offering pre-written contract templates, effectively giving users the ability to operate independently of any third-party while using the platform.
For this reason, CoinSpark could help play a role in helping extend the benefits of bitcoin’s ledger technology to fiat currencies, he said, adding:
“I think the most compelling use case [for CoinSpark] is for governments to issue some of their currency in digital form. Just like you can hold physical US government dollars in your physical wallet, I think you should be able to hold some digital US government dollars in your digital wallet.”
This ability to move fiat money, Greenspan asserted, will help CoinSpark try to solve an issue affecting many asset exchange platforms – namely, how will it incentivize people to use the platform?
“The key missing element for cryptocurrency trading platforms is a fiat-denominated digital asset issued by a well-known entity with a strong reputation,” he said.
Lowering asset transfer fees
Greenspan further suggested that CoinSpark will offer users a cost saving when compared to traditional colored coins, which also allow assets to be exchanged directly via bitcoin’s block chain.
Colored coins, Greenspan suggested, do permit direct peer-to-peer exchanges between bitcoin and other assets, but tie the quantity of the asset to the total amount of bitcoin needed to execute the transaction.
CoinSpark, he said, aims to allow any quantity of asset to be transferred with a single transaction fee for miners:
“As a result the cost for any CoinSpark exchange transaction, of any value, will be no more than a single regular bitcoin transaction fee (currently $0.04).”
CoinSpark will notably not require the purchase of non-bitcoin tokens. By comparison, MasterCoin requires users to hold its native currency MSC in order to buy or sell that property on its exchange.
OP_RETURN advantage
CoinSpark is able to achieve its functionality by utilizing OP_RETURN outputs, an update to the Bitcoin protocol introduced earlier this year that allows users to embed 40 bytes of data into a block chain transaction record. At the time, the update was hailed by core developers as a way to enable a new wave of smart contracts.
CoinSpark is encouraging other wallets to support the protocol by providing software libraries in five languages alongside a detailed developers’ guide.
To create an asset through CoinSpark, the platform offers a web form that requires users to provide information such as the asset name, asset description and asset quantity, alongside such features as the divisibility of the unit and the governing law for the asset.
Assets can also be set to expire in as little as one month or as long as 20 years.
Greenspan concluded by acknowledging the debate surrounding whether crypto 2.0 applications are weighing down bitcoin’s network with non-essentially data, but asserting that projects like CoinSpark add real value and innovation to the ecosystem.
He told CoinDesk:
“I believe, there are compelling applications for this metadata, but bitcoin adopts a restrictive policy, creative ideas will naturally move to a cryptocurrency with a more liberal approach. That would be a loss, both financially and ideologically, for the bitcoin community as a whole.”
Images via CoinSpark; Shutterstock