August 1, 2013
Complete MasterCoin Specification Released
J.R. Willett, aka dacoinminster, is a Seattle-based software engineer and Bitcoin expert. Like many in the Bitcoin community, he sees a future where Bitcoin is adopted by the mainstream for a wide variety of purposes. To achieve that goal, Willett believes that there’s more work to be done around the Bitcoin protocol.
After 2 years of research and discovery, Willett has released a complete specification for building a protocol layer on top of Bitcoin, similar to how HTTP runs on top of TCP/IP. He calls the new protocolMasterCoin.
The coins of the new layer have
• Additional security features to make your money much harder to steal
• Built-in support for distributed betting (no need to trust a website to coordinate bets)
• Capability to hold a stable user-defined value, such as an ounce of gold or U.S. Dollar, with no need to trust a person promising to back up that value
The name of the new protocol layer is “MasterCoin” and it is 100% message-based, meaning that it encodes all its protocol data as hidden messages in the block chain which have special meanings, such as placing a bet, or transferring MasterCoins to another address.
Once you own MasterCoins, you have the building blocks for creating GoldCoin, USDCoin, EuroCoin, and any other real-world asset. These child currencies will then be “meta stable” (holding their values as long as they remain sufficiently backed by MasterCoins held in escrow). Their target values are maintained by protocol actions which control the available supply.
Here is the complete MasterCoin specification.
Willett is inviting early adopters to purchase MasterCoins by sending Bitcoins to the Exodus Address: 1EXoDusjGwvnjZUyKkxZ4UHEf77z6A5S4P. These funds will be used for development of software implementing the MasterCoin protocol.
Below is a video of J.R. Willett speaking on a Bitcoin expert panel in May 2013.
Yesterday, JR Willet announced official launch of Mastercoin
which includes an interesting “investment” opportunity. Send coins to the “exodus address” and you will get 100x that amount of master coin. Mastercoins aren’t worth anything now, but neither were bitcoin back in the day, or litecoin when it was launched, or… that’s the general idea.
IIUC, there will only ever be as many MasterCoins as are sent to the exodus address by September 1 2013 (reedit comment from above thread). So if master coin is a success, the initial investors should win big. Well… To be honest, I don’t understand how exactly they win big yet, but I haven’t given up on understanding the whitepaper. Even if the scheme fails, I think the ideas are important, so I am devoting some time to building up real intuition.
TLDR: It sounds like a scam, but I don’t think it is. But that doesn’t mean it will work. But I hope it does! But it has some problems.
The Mastercoin project is in the same spirit as Colored Coins (http://www.bitcoinx.org/) and, less directly, ripple and open transactions. Build services on top of bitcoin where non-crypto assets can also be traded. Open Transactions might fulfill all the requirements without the added complexities of Bitcoin, and without being a burden on its blockchain.
Overall I like the direction Colored Coin is taking better, but the colored coin development effort seems to be stalled in disarray at the moment, perhaps allowing MasterCoin to take center stage.
My concerns with Mastercoin are pretty much summed up by this thread.
That being said, while my brain doubts, my heart likes. I like the whitepaper, and I like Willet.