Color Coins is going to overload the block chain and cause major problems with the core bitcoin features.
-bm
Interesting question.
If Colored Coins could choke Bitcoin it means the anybody can do such an attack regardless of Colored Coins. I think that's why we have the 540 Satoshi dust limit.
My understanding is that currently there is a 7 transaction per second limit on Bitcoin, that means if you send 5,000+ transactions in 10 minutes it would go beyond the limit. You can do 5,000 transactions for just 0.027 BTC.
no your thinking is off. Color Coins and Counterparty create an INCENTIVE to create many many more transactions that don't have a strict BTC value.
all these discussions already took place on the BitcoinX list.