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. It 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.
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.
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.