Simple Ledger Protocol is one of the simplest, fastest and most liberating token systems in existence. SLP tokens are easily created, traded and managed on the Bitcoin Cash (BCH) blockchain within seconds; costing the user only fractions of a penny for each transaction.
The Big Picture of Crypto Assets
Cryptoassets are broadly divided into cryptocurrencies, crypto commodities and crypto tokens. A cryptocurrency fulfils some of the three well-defined purposes: to serve to exchange, store of value, and unit of account. While crypto commodities mean either a computer, storage or bandwidth provisioned via a blockchain network. Crypto tokens are finished products such as digital goods and services like media, social networks, games and more. Just as in the physical world, where currencies and commodities fuel an economy to create finished goods and services, so too in the digital world the infrastructures provided by cryptocurrencies and crypto commodities have come together to support the aforementioned finished-product digital goods and services.
Since the launch of Ethereum, a near endless stream of dApps have been released to run on it, many of which have their native unit. These dApp native units are referred to as crypto tokens or simply tokens in brief. A dApp with its native crypto token will use ether as a crypto-commodity to pay the Ethereum network to process certain dApp transactions. Most crypto tokens are not supported by their blockchain. Often these crypto tokens operate within applications that are built on a crypto commodity’s blockchain, such as Ethereum. An analogy is applications such as Safari running on Apple: these applications in Apple’s App Store don’t have to build their own operating systems, they run on Apple’s operating system.
Storing and managing tokens on a blockchain provides greater transparency and integrity than traditional forms of asset accounting and trading. Virtual gaming assets, licenses, digital media rights, gift cards, and company stock shares can all be tokenized on the blockchain. Tokens can also be traded peer-to-peer with no middleman, allowing for a new kind of decentralized digital marketplace.
However, SLP runs on the Bitcoin Cash blockchain and not the Ethereum blockchain. In a nutshell, one can think of SLP as a ‘transaction within a transaction. SLP transactions live within a special output known as OP_RETURN, which is a part of a standard Bitcoin Cash transaction. If Alice wants to send Bob some tokens, she sends a minimal (dust) amount of BCH, and the transaction also contains the data to transfer the tokens. The SLP protocol is simple, which makes it robust. The protocol simplicity makes it easy for new wallet software builders to pass the protocol unit tests and achieve perfect SLP compliance.
Some salient features of SLP are:
- SPV Friendly: The first and only Bitcoin Cash token system that supports light wallets
- Simple: SLP is incredibly simple and easy to understand
- Robust: SLP has a limited set of consensus rules which makes the system reliable. A unique address format helps prevent loss of tokens.
- Permission-less: SLP tokens can be exchanged peer-to-peer with no trusted third party.
- Free and open-source: SLP is open source. There are several free and open-source SLP wallet implementations, including Electron Cash and Badger.