This article was first published on Stories by Qtum on Medium
Qtum plans to support the issuance of confidential assets on the blockchain. In our previous article, we analyzed a representative project of confidential assets, Zether. This article focuses on existing works in this field and describes our motivations for supporting confidential assets.
In the early days of Bitcoin, developers have been exploring how to store arbitrary data in Bitcoin transactions. Until the release of version 0.9.0 in 2013, the new opcode of OP_RETURN was added to the Bitcoin script. OP_RETURN allows up to 80 bytes of data to be recorded in the Bitcoin output script. After that, the number of transactions using OP_RETURN increased rapidly .
A series of protocols were born based on OP_RETURN, see  for details. These protocols take advantage of the open and immutable features of the blockchain, to store application data in specific formats in OP_RETURN, thus building a wide variety of applications. Among them, there is one category of protocols, such as Open Assets  and Omni Layer , allowing users to create new assets on the Bitcoin blockchain. The issuance, transfers, and other data of assets are stored in OP_RETURN. Take the Omni Layer as an example, whose supported data types are as follows:
As a result, a large number of assets on the Bitcoin appear. Most of them are pegged to assets in the real world, such as gold, diamonds, and so on. Such type of assets is also called Colored Coin. To date, the most famous Color Coin we know is USDT, which is pegged to US dollars and appears on most cryptocurrency exchanges.
There are many advantages to issuing assets on Bitcoin. The most important one is that the issuers can rely on the security and usability of Bitcoin without having to develop the ...
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