Bitcoin Lightning Network is compatible with digital assets, and colored coins technology is the key

Currently, there are more and more tests on Bitcoin Lightning Network. Industry startup Colu has released a demo application showing how Lightning Network can be compatible with colored coins. Combining the concept of colored coins with Lightning Network means that more assets can achieve ultra-high frequency transactions.

Users can now use Colu's demo application to send test transactions through the "off-chain" network, which may provide the first user experience of the Lightning Network project. It is reported that the Colu team has reached a cooperation with the startup Lightning Labs to adjust its existing code to make it compatible with colored coins.

So the question is, is it really necessary to have a mortgage record with almost unlimited transferability?

Colu co-founder Mark Smargon said he believes the feature could help solve a big problem with colored coins, but he acknowledged that it may not be used in every use case.

He told reporters:

“The biggest argument for colored coins is that they currently don’t scale, Bitcoin transaction verification is very slow, its transactions per second throughput is limited to a very low level, and transaction fees are becoming increasingly expensive.”

He believes that the most applicable use case at present is local currency, which has become a major focus of Colu.

The interface that implements this idea

A few years ago, we saw a debate about the size of a field in Bitcoin code (called OP_RETURN ), which was used by startups and developers to store additional data on the blockchain.

But it has become a controversial idea because OP_RETURN could bloat the blockchain and harm the overall scalability of the blockchain.

Making colored coins compatible with an off-chain platform, as Smargon suggests, could allow transactions to scale from about three per second to millions.

It is reported that once you click on this demo page, a new Lightning Network account will be automatically created (with a random string of numbers, called a "Lightning Network ID"), which will give the user a test fund of $5,000, and then the user can transfer funds through Colu's compatible version of the Lightning Network.

Need to wait for quarantine verification to be implemented

It is reported that this demo application is run on the private Bitcoin network "simnet" simulated by Colu.

Smargon said this is the same as running on the Bitcoin test network, and his team is ready to apply its products to the real Bitcoin network, but this will at least have to wait until Segregated Verification is implemented.