<p>bitcoin <a href="https://en.bitcoin.it/wiki/Script" rel="nofollow noreferrer">wiki</a> states that
OP_RETURN:  </p>

<blockquote>
  <p>"[...]Marks transaction as invalid. A standard way of attaching extra data to transactions is to add a zero-value output with a scriptPubKey consisting of OP_RETURN followed by exactly one pushdata op. Such outputs are provably unspendable, reducing their cost to the network[...]"</p>
</blockquote>

<p>There's no point in a signature of an unspendable output I guess but I might be wrong here.</p>

<p>I found <a href="https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch07.asciidoc" rel="nofollow noreferrer">chapter 7</a> of mastering bitcoin helpfull where it explains the 
"Data Recording Output (RETURN)."</p>

<p>Also check this blog <a href="https://www.wlangiewicz.com/2014/10/24/how-to-put-custom-messages-into-bitcoin-blockchain-op_return/" rel="nofollow noreferrer">post</a> for a different spin on it.</p>

<p>I'm very interested in the colored coins idea but noticed that active implementations are rare from what I could find.  </p>

<p><a href="https://www.coindesk.com/blockchain-startup-coinprism-to-shut-down-in-2-days/" rel="nofollow noreferrer">Coindesk</a> reported <a href="https://www.coinprism.com/" rel="nofollow noreferrer">coinprism</a> shut down in 2018 and the underlying protocol <a href="https://github.com/OpenAssets" rel="nofollow noreferrer">open asset</a> hasn't had any commits in years.</p>

<p>Same goes for colored coins by Colu <a href="https://github.com/Colored-Coins" rel="nofollow noreferrer">github repo</a>.  Colu <a href="https://medium.com/colu/announcing-colored-coins-and-lightning-integration-8e54d5dbfd0e" rel="nofollow noreferrer">announced</a> a colored coin lightning integration in 2016 which I'm also starting to investigate as an alternative but their demo site is also down.</p>

<p><a href="https://github.com/CounterpartyXCP" rel="nofollow noreferrer">Counterparty</a> makes use of op_return so you might want to check that out.</p>

<p>You should also check out this <a href="https://bitcoin.stackexchange.com/questions/77882/how-do-coloured-coins-work">post</a> which gives a colored coin example for the  <a href="http://www.omnilayer.org/" rel="nofollow noreferrer">Omni Layer</a> that @Murch mentioned in <a href="https://bitcoin.stackexchange.com/a/79453/10658">his answer</a>.</p>

CC BY-SA 4.0
2018-09-20T21:02:25.410Z
2018-09-21T19:40:49.320Z
2018-09-21T19:40:49.320Z
I'll be respawned
<p>Colored coins are second layer networks that run another protocol on top of the Bitcoin (or another) blockchain. While they transmit the full transaction information within their network, they don't use their own blockchain. Rather, they anchor their transactions into <code>OP_RETURN</code>s on the carrier chain for confirmation. Instead of spending such an <code>OP_RETURN</code> directly, the recipient may craft another <code>OP_RETURN</code> that references previous payment outputs and proves authorization to spend.</p>

<p>Nodes of the colored coin network understand both the colored coin network's messages and consume the Bitcoin blockchain to infer the network state. When the recipient of such a colored coin transaction wants to spend their funds, they encode another message into an <code>OP_RETURN</code>.
Colored coins can be used to represent other assets such as stocks or property.</p>

<p>A current example of such a network is <a href="https://www.omnilayer.org/" rel="nofollow noreferrer">Omni Layer</a> which to transact with <a href="https://tether.to" rel="nofollow noreferrer">Tether</a>. Omni Layer spans its network using Omni Core, an extended variant of Bitcoin Core.</p>

CC BY-SA 4.0
2018-09-21T06:53:34.337Z
2018-09-21T06:53:34.337Z
Murch
<p>In chapter 12 in <a href="https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch12.asciidoc" rel="nofollow noreferrer">Mastering Bitcoin</a> it is talking about bitcoin application and one of them is colored coins.  </p>

<p>There is an example for colored coin output:</p>

<p><a href="https://i.sstatic.net/5GUKK.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/5GUKK.png" alt="enter image description here"></a>
The second one is colored coin output. It is just a "OP_RETURN {some encoded value}". I understand that in the output, we can decode and get some information, but how can they transfer assets represented by the encoded value to others?</p>

<p>Because there is no signature or other information in the output can be used as a unlocking script, the output, whatever it is, cannot be certified as it is owned by someone.  </p>

<ul>
<li><p>Why there is no signature information in output?  </p></li>
<li><p>Can you give an example or a real colored coin output?</p></li>
</ul>

<colored-coins>
How to unlock colored coin?
Frank Kong
# How to unlock colored coin?

(Asked by: username_0 on 2018-06-10)

In chapter 12 in [Mastering Bitcoin](https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch12.asciidoc) it is talking about bitcoin application and one of them is colored coins.

There is an example for colored coin output:

[![enter image description here](https://i.sstatic.net/5GUKK.png)](https://i.sstatic.net/5GUKK.png)
The second one is colored coin output. It is just a "OP\_RETURN {some encoded value}". I understand that in the output, we can decode and get some information, but how can they transfer assets represented by the encoded value to others?

Because there is no signature or other information in the output can be used as a unlocking script, the output, whatever it is, cannot be certified as it is owned by someone.

* Why there is no signature information in output?
* Can you give an example or a real colored coin output?

**Tags:** colored-coins


---

## 2 answers

### Answer by username_1 on 2018-09-20. Score: 1 | Accepted answer

bitcoin [wiki](https://en.bitcoin.it/wiki/Script) states that
OP\_RETURN:

> "[...]Marks transaction as invalid. A standard way of attaching extra data to transactions is to add a zero-value output with a scriptPubKey consisting of OP\_RETURN followed by exactly one pushdata op. Such outputs are provably unspendable, reducing their cost to the network[...]"

There's no point in a signature of an unspendable output I guess but I might be wrong here.

I found [chapter 7](https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch07.asciidoc) of mastering bitcoin helpfull where it explains the
"Data Recording Output (RETURN)."

Also check this blog [post](https://www.wlangiewicz.com/2014/10/24/how-to-put-custom-messages-into-bitcoin-blockchain-op_return/) for a different spin on it.

I'm very interested in the colored coins idea but noticed that active implementations are rare from what I could find.

[Coindesk](https://www.coindesk.com/blockchain-startup-coinprism-to-shut-down-in-2-days/) reported [coinprism](https://www.coinprism.com/) shut down in 2018 and the underlying protocol [open asset](https://github.com/OpenAssets) hasn't had any commits in years.

Same goes for colored coins by Colu [github repo](https://github.com/Colored-Coins). Colu [announced](https://medium.com/colu/announcing-colored-coins-and-lightning-integration-8e54d5dbfd0e) a colored coin lightning integration in 2016 which I'm also starting to investigate as an alternative but their demo site is also down.

[Counterparty](https://github.com/CounterpartyXCP) makes use of op\_return so you might want to check that out.

You should also check out this [post](https://bitcoin.stackexchange.com/questions/77882/how-do-coloured-coins-work) which gives a colored coin example for the [Omni Layer](http://www.omnilayer.org/) that @username_2 mentioned in [his answer](https://bitcoin.stackexchange.com/a/79453/10658).


---

### Answer by username_2 on 2018-09-21. Score: 1

Colored coins are second layer networks that run another protocol on top of the Bitcoin (or another) blockchain. While they transmit the full transaction information within their network, they don't use their own blockchain. Rather, they anchor their transactions into `OP_RETURN`s on the carrier chain for confirmation. Instead of spending such an `OP_RETURN` directly, the recipient may craft another `OP_RETURN` that references previous payment outputs and proves authorization to spend.

Nodes of the colored coin network understand both the colored coin network's messages and consume the Bitcoin blockchain to infer the network state. When the recipient of such a colored coin transaction wants to spend their funds, they encode another message into an `OP_RETURN`.
Colored coins can be used to represent other assets such as stocks or property.

A current example of such a network is [Omni Layer](https://www.omnilayer.org/) which to transact with [Tether](https://tether.to). Omni Layer spans its network using Omni Core, an extended variant of Bitcoin Core.


---

