Colored Coins is a way to issue and transfer any assets on the Bitcoin blockchain. Colored coins can be used to represent anything, such as stocks, bonds, smart properties, securities, precious metals, commodities, other currencies (such as dollars, pounds or euros), and even other crypto-currencies.
A company which wants to do an IPO can do so with Colored Coins in a matter of minutes and practically for free: they can use Coinprism to create and issue shares. The shares can then be exchanged as easily as Bitcoins through the Blockchain, across the world, instantaneously and with minimal fees.
Colored Coins also enable people to create smart properties. A deed for a house can be represented on the Blockchain as a colored coin. The owner of that coin is then the legal owner of the house. Transferring ownership of the house becomes as simple as making a Bitcoin transaction.
You can read more about Colored Coins on the Coloredcoins.org FAQ page.
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