Coinprism Adds Armory Support

Colored Coins are Bitcoins with the addition of Meta Data. With the addition of this small amount of information Colored Coins can represent many different assets; stocks, bonds, commodities, or other currencies. Colored Coins are traded in a frictionless environment by any person in any location. The transfer of asset ownership becomes easy and is secured by the Bitcoin network. They cannot be counterfeited, nor can they be double spent.

Coinprism is the wallet specifically designed to unlock the potential of ColoredCoins. With the support of Armory, Coinprism has integrated a slew of security features to protect the value of assets held as Colored Bitcoins.

“Armory is the most full-featured Bitcoin wallet management application available. It enables multiple encrypted wallets, permanent one-time “paper backups” for those wallets, and even a system for storing Bitcoins on an offline computer to keep them safe from online attackers. “
— – Armory

Any bitcoin (or fragment) belongs to a cryptographic “private key”, an 80 digit number. Bitcoins cannot be transferred unless the holder of the private key uses it to authorise the transaction. The digital signatures used by Bitcoin are effectively impossible to fake without access to the private key. A “wallet” is a file on your computer that holds all of your private keys. It is a list of these secret numbers. You are the only person on the planet who has access to those private keys, there is no central authority that can grant you access. This means two things:

1. If you lose your wallet, the coins you own are lost forever.
2. If someone else gains access to your unencrypted wallet, they can steal all of your Bitcoins.

Armorys open source solution implements three key theories to provide increased security in this decentralised environment:

Encryption, Graphics Processing Units (GPUs) have proven to be quite useful for brute-forcing encryption passwords. Armory uses a “key-stretching” method that requires an amount of memory that is trivial for your regular processor, but way too big for a GPU.

Offline wallets, also known as “cold storage”, protect your wallet’s private keys by keeping them on a computer that will never be connected to the internet.

Multi Sig transactions, these are often referred to as M-of-N transactions. In the classic “2 of 3” example a buyer commits money into a multi sig transaction, with a seller and a third-party arbitrator. If the transaction goes smoothly both buyer and seller sign the transaction to release the funds, supplying 2 of the 3 required keys. If something goes wrong the third-party will arbitrate and provide the second signature in conjunction with either the buyer or seller.

Armory have taken the idea of Multi Sig transactions, producing two end user products;

“Simulfunding” is the simplest example of a Bitcoin “contract." All parties specify how much they are contributing (the terms), the parties combine these contributions into a single transaction (written contract), then all parties sign it (execution of the contract). Either the contract is executed in full and all parties contribute at the same time, or no Bitcoins move at all.

A "lockbox" is created from a list of public keys (and some meta-data), and then anyone can put assets into the lockbox. To spend from the lockbox, one party initiates a transaction, and then circulates it to collect the required number of signatures. Whoever adds the final signature can then release the assets.

Armory is known to be one of the leaders in the crypto space for offline storage and provides scrupulous defence against hackers and malware. Using Armory allows Coinprism users to access their colored bitcoins, via their Coinprism Wallet,  with the advantages of Armorys well crafted, user friendly security.

“This is an important step as more and more people are using colored coins with valuable assets, and want bullet proof security,”
— -Flavien Charlon, founder and CEO of Coinprism

B.Holmes, author of The Range of Illusion and The Private Key installments, is currently located in Thailand, researching and writing about crypto. You can follow B.Holmes on twitter @BanteringB, or contact via email: [email protected]