Ethereum: An all-in-one cryptoledger smart property turnkey solution

CoinDesk published a new story about a start-up called Ethereum which is launching in a week.  This project will include a distributed mining network + software development platform.  Here is the technical whitepaper.

Not to oversimplify it but they want to use a different, more ASIC-resistant proof-of-work along the lines of Scrypt (which is used in Dogecoin and Litecoin) and maybe also integrate proof-of-stake as an alternative.  While there may be some merit to PoS, there are not many devs that are fans of it (see a small counter-explanation here) notably Warren Togami (lead dev of Litecoin).

The software development side is quite interesting.  Basically one of the limitations with the current Bitcoin protocol (that will be somewhat rectified in version 0.9) is the lack of native support for “colors.”  That is to say, the token system since the first release four years ago, can represent just one particular asset class — which thus far has been fiat value (perhaps there could potentially be hundreds of different blockchains to represent different colors, but then you would need to build hashrate infrastructure to support the transaction, security, etc.  Possible maybe.).

With a colored token system (e.g., “coloring” a specific amount of a token green or blue to represent a specific asset), anyone can add, trade and track assets through one blockchain (obviously if that blockchain has problems it can be ported and used on another cryptoledger).  Mastercoin and the Colored Coin project are attempting to do something similar (as are Nxt, BitShares, Counterparty and Open Transaction).

It will be cool to see how the community reacts to the crowdfunding effort starting next weekend.  Note: for contrast in approach, here is the Colored Coin overview paper.

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