It is no fun watching a crypto exchange shut down. This is especially so if a platform has been around for years. Coinprism has become a household name in the crypto world with colored coins.
However, these services will end on March 31, 2018. The API and block explore will be taken offline too. This development is quite worrisome for the crypto enthusiasts. However, no one is sure the exact reason why Coinprism is shutting down.
Coinprism Has Had a Good Run
Coinprism has enjoyed quite a lot of success since it launched in 2014. The service has continually received positive attention in the crypto world. The wallet service will be the first to go in a few weeks from today.
When this happens, the API shall become redundant as well. It is quite evident that the crypto world is quite competitive right now. It may be the reason the exchange is shutting down. Small players are simply unable to compete with major players, especially considering how volatile the crypto world has been.
The Rise of ERC20 Tokens
The rise of ERC20 tokens has overshadowed the colored coins. The colored coins used to be considered the tokens of the Bitcoin world. However, this solution never achieved full potential. The reason is that only a few people expressed interest in the service.
Besides that, a block explorer is not that hard to find. Without any more innovation, a shutdown was the only option the exchange had. The exchange has advised every user to withdraw funds before March 31, 2018.
The Privates Key
Additionally, users on the platform have been advised to export their private keys as soon as they can. This is a quick process, which will ensure users have access to all their funds at all times. Once exported, the private key can be swept into any wallet that accepts Bitcoin.
Coinprism only stores the encrypted form of the private key. If a user needs it, it can be accessed via a password. However, if anyone has forgotten his or her password, it will not be possible for Coinprism to assist you in any way.
Users that want to retain their colored coins will also need to find a compatible wallet. The existing Bitcoin wallets do not support colored coins. It is unfortunate that the exchange has come to this conclusion. However, it was not unexpected. We might never find out the real reason, but it is an understandable decision.
The Colored Coins Concept Is Still Solid
While colored coins were bumped off by ERC20 tokens, the concept behind them is still solid. When the Ethereum blockchain is flooded with transactions, those tokens cannot move. It is possible that a new company will pick up where Coinprism has left off.
The exact role they will play in the industry is still not well known. However, the world of crypto is full of young and creative minds. Someone will eventually find a way to use what Coinprism developed.