Nxt Colored Coins

Nxt Colored Coins is one of the more curious services and goes hand in hand with a decentralized exchange.

First though, some background: With the Bitcoin blockchain, transactions can be traced. Not to a person mind you, but what is meant is that an individual coin or pieces of that coin can be traced back on a transaction by transaction basis. Since this is a case, then if it was possible to expand the protocol to allow a person to designate or "color" a particular coin, we could build a bridge from the virtual crypto currency world to the physical world. That colored coin can then be used to represent some physical entity here on earth. Property, stocks/bonds, commodities, or any concept that can be concretely identified could be colored.

This additional realization of NXT's blockchain is exactly what is being built into the code to allow for decentralized trading of real property. Coupled with a decentralized exchange, colored coins become a very powerful next generation currency.

Forkedchain. (January 2, 2014). What is NXT in the world of cryptocurrencies? Nxtcrypto Foundation Forums. Retrieved from http://goo.gl/wHnBUl