Bitcoin Cash (BCH) To Add Colored Coins And Smart Contracts Support
Bitmain, the largest mining company in the world, known for the creation of its ASIC miners, has recently proposed alterations for Bitcoin Cash. The company is developing smart contracts and on the Bitcoin Cash protocol, according to Chinese WeChat groups from company devs.
The team’s proposal is to implement fully colored coins. This concept is a way to realize real-world assets on the blockchain. The concept was initially proposed for the original Bitcoin chain. Basically, one could use small amounts of metadata on a standard transaction to store the code of the transaction and the ownership of the goods. This way, the code is used to assign the real-life assets.
Bitcoin Cash Coins Could Make A Hard Fork
The OP_RETURN protocol was created to store the metacode of the transactions that contained the ownership of goods. The idea of these colored coins was mostly well accepted in the Bitcoin Cash community and turned into the OP_GROUP protocol, that uses native tokens on the blockchain to do this.
However, to implement the OP_GROUP protocol could be really hard as the consensus protocol of the network would have to be changed. Historically, consensus changes generally cause rifts in the communities. In fact, this is how Bitcoin Cash was born.
This problem has led many developers around the world to look for solutions to this problem as the Bitcoin Cash community does not want a new fork. One of the most popular plans is to use these functions on top of BCH chain as a layer.
OmniLayer Protocol Could Solve The Issues
Bitmain, which is developing this technology, has been one of the strongest actors defending the changes. The main idea is to use the OmniLayer Protocol to turn the technology on a layer on top of the chain. This protocol has been already used for the production of USD Tether (USDT), so it is functional and tested by others.
As the protocol could work without changing the consensus of the network, it seems like one of the safest bets at the time.
Smart Contracts On Bitcoin Cash
If the idea for OmniLayer Protocol is actually implemented, then smart contracts could be used with the Bitcoin Cash blockchain, as the Wormhole technology makes it possible to use it. According to reports, the first token of this protocol would be known as Wormhole Cash.
The Bitmain team has the plan to use the OP_RETURN protocol to store the data of the tokens and the transference of tokens could be made via different contracts. Wormhole Cash would add new features like transferring, burning and issuing new tokens on the BCH blockchain without having to change the consensus rules.
By using this method, the proposal can be integrated into the network and then specific nodes will run Wormhole clients to identify the OP_RETURN protocol which will on top of the original protocol of Bitcoin Cash.
The security protocol of this new technology will proof of work and will use the same algorithm of Bitcoin Cash. The second layer of security will be that the nodes running Wormhole will never be able to analyze any data that does not match the protocol because every transaction will be analyzed more than once.