MasterCoin – your new high yield investment!
(Hebrew speakers might appreciate the wiki entry I prepared about MasterCoin)
The title of this post is a tribute to the first post on my blog promoting Bitcoin, written on March 27 2011 (Bitcoin was worth 80 cents then, compared to $106 today).
Of the various alt-coins (Bitcoin forks), I have only promoted Litecoin on this blog, on October 2011 – it was a chance for early adopters to join in on an attempt to make a “fairer, more decentralized Bitcoin”. Litecoins have started as being worth 0 BTC, and have slowly built up value, especially over the last 6 months. Currently 1 LTC = 0.025 BTC, which is more than I would have believed myself a year ago, and Litecoin’s market cap is already 5% of Bitcoin’s ~ $1,000,000,000.
Today, I’d like to expose you to a riskier, crazier investment, called MasterCoin.
MasterCoin isn’t exactly a Bitcoin fork, but rather it’s a system that is built on top of Bitcoin, that can accommodate many different currencies, betting, self-regulating currency issue, and more. It’s really beyond the scope of this post to explain MasterCoin, but I’ll just briefly summarize:
- Dacoinminster AKA J.R. Willet has first written about MasterCoin a year and a half ago. The idea was very exciting, and inspired some other projects such as Colored Coins. At the time, there were a lot of missing details, and the project kind of went into hibernation.
- Since then, other projects such as Colored Coins and Ripple tried to attack this problem of modeling real world currencies in a decentralized way. Each of these project takes a different approach to accomplish similar objectives, but both have attracted great interest from the Bitcoin community.
- Yesterday, Dacoinminster finally was able to fix the apparent flaws in the first version of his paper (dubbed v0.5), and released version 1 on the protocol.
- The source code that implements this protocol isn’t yet built. Dacoinminster will use funds collected from a fundraiser, kickstarter style, to fund the development.
- People who fund the project (until August 31 2013) will receive in return a given amount of MasterCoins, already determined in the protocol.
The full details are available in the linked resources. I believe MasterCoin can be an important part of the growing Bitcoin ecosystem. Thus far, 29.6 BTC have been raised in the first few hours of the fundraiser (about $3000). I plan to invest some of my own.
- Anything I say here or anywhere else should not be considered investment advice or any other type of professional advice. I do not act in any way as a financial advisor and do not hold myself out to be such. Please consult a financial advisor before investing in MasterCoin (they will probably have a heart attack at the thought).
- See in particular the Risks document that Willet himself prepared.
