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Tim Swanson (of numbers), recently wrote for coindesk on cryptoledger developments.

You may have seen his other works from the huobi coverage, to volume and activity, amongst other stuff on the China exchanges.

Besides the bitcoin mining (and now scrypt mining) arms race in hardware equipment, the race is on for Bitcoin 2.0 or the facebook of bitcoin, following myspace and friendster.

Tim takes you through some of these developments, talking to people trying to build something new on top of the protocol.

Included in his coverage (but certainly not exclusive) are namecoins, mastercoin, notarizations, timestamping, wills, stocks, shares, titles, colored coins developments.

http://www.coindesk.com/smart-property-colored-coins-mastercoin/

Cryptoledgers, such as those utilized in cryptocurrencies like bitcoin and litecoin, have the ability to be employed in other capacities. They are not merely one-dimensional, one-trick ponies relegated to simple fiat-only exchanges.

For example, last week Kyle Torpey published an overview of several upcoming projects that utilize the Bitcoin block chain to provide new features and financial instruments for users globally.

While it is uncertain that any or all will be successful in accomplishing their goals, these new innovations, like Namecoin before them, show that cryptoledgers can be integrated to provide rich functionality beyond the current token system.

For those unfamiliar with Namecoin, it currently acts as a decentralized DNS system that makes domain name censorship difficult, if not impossible. It was created in 2010 as a modified version of Bitcoin, and in 2011 the mining of Namecoins (after block 19,200) was effectively merged with Bitcoin through a software update (eg pools had to use a new software release).

While Namecoin provides DNS functionality it can also be utilized to be used as a messaging system, torrent tracker and even as a notary (which other cryptocurrencies can do as well).

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Why is this important?

In 2012, Mike Hearn (a Bitcoin developer now on the board at Circle) gave a presentation in London in which he describes other financial instruments and practical business uses that a cryptoledger can provide through the use of “timelock” (technically referred to as nLockTime).

“Colored coins [allow] centralized assets to be traded in a completely decentralized way. Every single equity in the world has a central issuer – the company itself.”

This makes it possible to build ‘smart property’ or contracts that, in turn, create a distributed digital verification system that bypasses the need for a central repository.

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For example, if a car ignition system is reengineered to connect with a cryptoledger protocol, it could enable car owners to buy and sell vehicles remotely via trusted timestamping.

The execution of a will (eg disbursement of a trust fund) is also possible, albeit slightly more complicated, in that someone would need to build a system that could scan obituaries for deaths and notify the block chain of any changes.

In actuality, the potential applications can be expanded to anything that involves rights verification (such as stocks, titles to houses, digital media – as well as the keys to houses and cars). In fact, this past fall Mike gave another interview describing these potential applications in more detail.

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