In January of 2012, J. Willett published a whitepaper entitled, “The Second Bitcoin Whitepaper.” He postulated that the pre-existing Bitcoin network could be a platform by which other applications were built, including new currencies that are not in need of their own blockchain, and the development of smart contracts. In July of 2013, an updated version of the whitepaper was released calling for funding of the Master Protocol project, with specifications released at the end of the year detailing spending limits for savings wallets and contracts.
The Master Protocol would allow for the creation and exchange of smart properties as well as user-developed currencies. Mastercoins are the means that bind Bitcoin to these applications built atop it. It would allow for decentralized functionality through smart contracts. Without any software development, users could design and release their own currencies through the Master Protocol. Property, not just capital, could be exchanged through the Master Protocol, such as titles, deeds, and physical products. In order to fund the development of the Protocol, an “Exodus Address” was created, wherein those who sent Bitcoin donations to this address in August of 2013 received one-hundred Mastercoins per each Bitcoin sent. Through this, 563,162.4 Mastercoins were created and sent into the public. An additional 56,316.2 Mastercoins were created to fund development of the protocol.
What Are Mastercoins? How Do They Differ From Bitcoin?
Mastercoins are the digital capital needed to utilize the Master Protocol. The Master Protocol uses the block chain to enable features such as smart contracts, user developed currencies, and decentralized peer-to-peer marketplaces. The Protocol is the natural development of Bitcoin, layered atop it. A total of 619,478.6 Mastercoins exist and no more will ever be produced, whether through mining or any other means.
In September of 2013, the Mastercoin Foundation was created to manage the currency in the Exodus Address and to distribute Mastercoin. The board intended not to become a central hub through which all Mastercoin operations traveled through, but to be a transitional entity ushering in a democratic system as to the future decisions of Mastercoin. Mastercoin transactions require a fee in bitcoins in order to be added to the blockchain, since they are fundamentally Bitcoin transactions with different data in their outputs.
What is Mastercoin’s Omniwallet?
is a new web wallet that intends to merge high-level security, an intuitive interface, and support for multiple cryptocurrencies. The user wallets are backed up every thirty minutes, and support for linking wallets to social media accounts is available. Private keys are not sent to the server except in an unreadable encrypted format, with the entire program being open source, and hosting being available on any server of the users’ choosing. It requires no software to download, no synchronization with a blockchain, and has a focus on an intuitive interface.
Omniwallet is pre-disposed to work with Bitcoin and Mastercoin, with native support for smart properties along with user created currencies developed through the Master Protocol. It intends to branch out to other alt-coins that are not created through Mastercoin, such as Litecoin and others. Caution should still be excercized whilst using Omniwallet, especially with large sums, as it entered beta July 1st, 2014. The team looks forward to creating crowdsale pages, developing exchanges between different kinds of user coins, and contiuing crowd-sourced security testing.
The Master Protocol and Omniwallet are bringing both the development of user currencies, and smart contracts, to the masses of the Bitcoin community. The goal is to make this easy and not require the need for individuals to test software on their computer. This could signal a new era in cryptocurrency development with currencies being so simple to create that they might be used in theme parks as tokens for rides or as in-store credit when exchanging items in brick and mortar establishments. The availability of usage of smart contracts expands the range of what is possible with Bitcoin and other currencies, coupled with the development of user currencies, cryptocurrencies may become the means by which all such transactions occur. Whether buying a home, paying for services or redeeming member rewards at a restaurant, the Master Protocol and Omniwallet bring Bitcoin into a new, interesting, realm. If the idea succeeds, and provides the usability it’s developers intend, it seems likely to bump up the price, and stability, of both Mastercoin and Bitcoin itself.
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