how does this relate to colored coins?
Hadn't actually heard of colored coins. It does seem similar. The more I think about it it seems like the main difference is that this system could put some necessary power into the hands of the corporation/underwriter. Additions like handing out dividends collecting votes, implementing splits etc...
The idea was more to make some other sources of income for miners in the same way that namecoin does. If a system like this is realized it could be extended to include all types of assets or proofs of assets.
The real idea is to get the trading room floor out of trading. Right now I own stock of AMD in the real world stock market. If I wanted to sell that to you I couldn't without jumping through a ton of hoops. Getting rid of those hoops should allow capital to flow to where it needs to faster.
