Mastercoin

Mastercoin also known as MSC is a new alternative cryptocurrency that was founded and started in July of 2013 by J.R. Willet. It is not similar to most other alternative coins as it is not build on its own foundation, but instead as an extension to the Bitcoin by using its protocols.

What is Mastercoin?

Mastercoin was created to serve as a exchange point between Bitcoins and smart properties/smart contracts created on the Mastercoin protocol. Its idea is to make the Bitcoin more decentralized and work better as a peer to peer currency compared to how it is now. It is supposed to get more high value transactions on the Bitcoin blockchain which would potentially benefit the Bitcoin miners and coin holders. By using the Bitcoins protocols the coin has advanced security, technology and network effects and by building on top of that the Mastercoin wants to create usage and applications that the Bitcoin is not able to because of its nature.

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Since the Mastercoin is using Bitcoins protocols and works through its algorithms it will only be possible to 619,478.5 coins or what is equal to 0.029 times the total supply of Bitcoins. It has a 0.01 Mastercoin transaction fee on all transactions to ensure that the inflation levels of it will remain stable throughout time and not derive too much. The goals of the Mastercoin and its foundation is to “Accelerate innovation throughout the world by building a global value exchange platform in an open, decentralized, transparent way” which they are aiming to achieve by allowing all entrepreneurs, investors and workers to freely exchange knowledge about the coin with each other and the community. They want to create different new projects to the cryptocurrency industry, which they believe will make the Mastercoin the best possible alternative to the Bitcoin and link the two together so that it will be easy for people to do high value transactions in the future.

Among the new things that Mastercoin wants to bring to the cryptocurrency community is the ability to create their very own cryptocurrency by using the protocols provided by them and the Bitcoin, but as it will be opensource it will also allow for creators to tamper with the settings and integrate new ideas if they believe they can improve the coins this way.

A New Layer to Cryptocurrency

Mastercoin, now known as Omni, is a digital currency and communications protocol built on the Bitcoin blockchain. Created by J.R. Willett in 2012, and brought to life in August 2013, Mastercoin introduced a new dimension to the Bitcoin network without altering its core protocol.

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A Complementary Approach to Bitcoin

Unlike many digital currencies, Mastercoin does not aim to compete with Bitcoin financially. Instead, it complements Bitcoin, operating as a protocol layer on top of the Bitcoin infrastructure. This approach allows for an enhancement of the Bitcoin network’s capabilities and provides a platform for Bitcoin users to create and trade property, bonds, and commodities.

Enhancing the Bitcoin Blockchain

Mastercoin harnesses the existing Bitcoin protocol, adding a layer that interprets specific Bitcoin transactions as Mastercoin transactions. This process introduces additional capabilities to the Bitcoin network, not unlike how the TCP/IP protocols expanded the functionalities of early internet networks.

An Experimental Currency

The birth of Mastercoin involved an innovative fundraiser, where Bitcoin users sent their Bitcoins to an exodus address. In exchange, they received newly minted Mastercoin tokens. This approach raised a million dollars, a significant achievement for a then-experimental currency.

Currency Layers and Alternative Currencies

By creating a platform for currency layers tied to real-world assets, Mastercoin has contributed to the growth of many alternative currencies. Additionally, it has extended the functionality of the Bitcoin blockchain, allowing for the execution of smart contracts, user currencies, decentralized exchanges, and more. This innovative approach exemplifies how chains can work with Bitcoins, leveraging the existing Bitcoin network’s power to drive further innovation in the cryptocurrency space.

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What Can I Use Mastercoins For?

Mastercoins can be used for investment purposes only at the moment, as it is possible to buy and sell Mastercoins for Bitcoins and Litecoins, so when the value of the coins go up you will be making a profit. There are no merchants or gambling sites that we could find that currently accepts Mastercoin as a payment method, but there will be the possibility in the future to create smart contracts by using Mastercoins. Once this feature will be fully functional, the value of the Mastercoin might stabilize at a slightly higher value and you will see more and more business men getting into the coin as it will be a low fee payment way.