RGB is a smart contract system, able to work on top of the Lightning Network and designed with confidentiality and scalability in mind. It is maintained by LNP/BP Standards Association.
What is possible with RGB:Issue digital fungible assets, like stock, bonds and other forms of securities Create different forms of collectibles (non-fungible assets) Create and manage sovereign/decentralized identities Design and run other forms of arbitrary-complex smart contracts Core concepts
As a smart contract system RGB is quite different from previous approaches, both Bitcoin-based (Colored coins, Counterparty, OMNI) and non-bitcoin (Ethereum, EOS and others):RGB separates concept of smart contract issuer, state owners and state evolution RGB keeps the smart contract code and data offchain RGB uses blockchain as a state commitment layer and Bitcoin script as an ownership control system; while smart contract evolution is defined by off-chain schema and Turing-complete scripting system using Simplicity language
More about these concepts can be read in this presentation.
Briefly, RGB smart contracts operate with client-side validation paradigm, meaning that all the data is kept outside of the bitcoin transactions, i.e. bitcoin blockchain or lightning channel state. This allows the system to operate on top of Lightning Network without any changes to the LN protocols and also gives a foundation for a high level of protocol scalability and privacy.
As a security mechanism RGB uses single-use seals defined over bitcoin transaction outputs, which provides ability for any party having smart contract state history to verify it’s uniquiness. In other words, RGB leverages Bitcoin script for its security model and definition of the ownership and access rights.
Each RGB smart contract is represented by some genesis state, created by smart contract issuer (or, put simply, issuer) and a directed acyclic graph (DA...