2. Some History
• Jan 2012 – MasterCoin 0.5
• Nov 2012 – Colored Coins
• Feb 2013 – Ripple
• August 2013 – MasterCoin 1.0
3. MasterCoin Is
• A new crypto-currency, but not a fork/alt
• A new programmable layer over Bitcoin
• A platform for user-generated currencies
• Still evolving
7. Saving Account
• Mark address as “saving”
• Transfers from this address will be reversible
(for a period of time)
8. Saving Account
• Mark address as “saving”
• Transfers from this address will be reversible
(for a period of time)
• A second “Guardian address”:
Can reverse any payment from the saving
9. Saving Account
• Mark address as “saving”
• Transfers from this address will be reversible
(for a period of time)
• A second “Guardian address”:
Can reverse any payment from the saving
• Guardian address should be secure
10. Saving Account
• Mark address as “saving”
• Transfers from this address will be reversible
(for a period of time)
• A second “Guardian address”:
Can reverse any payment from the saving
• Guardian address should be secure
• Users should not accept reversible TX
13. Currency Exchange
• Anyone can publish Buy/Sell offers
“Willing to sell 100 MSC for 1.5 BTC”
• If the offer is matched, the MSC is
automatically transferred
14. Currency Exchange
• Anyone can publish Buy/Sell offers
“Willing to sell 100 MSC for 1.5 BTC”
• If the offer is matched, the MSC is
automatically transferred
• Works for any currency derived from MSC
15. Price Feeds
• Anyone (e.g. Forex companies) can publish
price feeds for user-generated currencies:
– “Price of USD in Bitcoin today is 0.01”
– “Price of Gold in USD today is 1392”
• Users will choose reliable price feeds
17. Betting
• Users can publish bets:
I want to bet €200 with 2:1 odds that the price of Gold
will not pass $1500 in the next 30 days
18. Betting
• Users can publish bets:
• Other users accept them
I want to bet €200 with 2:1 odds that the price of Gold
will not pass $1500 in the next 30 days
19. Betting
• Users can publish bets:
• Other users accept them
• Bets are locked in and settled by the
MasterCoin protocol
I want to bet €200 with 2:1 odds that the price of Gold
will not pass $1500 in the next 30 days
34. Backed Currencies
• Escrow fund buys low and sells high
• First, it lets the market fix the price
• Only after a few days of divergence, it takes
action
35. Backed Currencies
• Escrow fund buys low and sells high
• First, it lets the market fix the price
• Only after a few days of divergence, it takes
action
• A self-fulfilling prophecy
39. Implementation
• Bitcoin addresses:
– Can hold MasterCoin
– … and other MSC-based currencies
• Operations (authorized by private key):
– Send currency
– New specialized operations
40. Encoding
• Operations are encoded on the Bitcoin
blockchain
• Uses “fake Bitcoin TX”, each hold 20 data bytes
• The fake ops are interpreted by the
MasterCoin layer
41. Encoding
• Operations are encoded like TCP-IP
• Split into 20 byte packets
• Use sequence numbers for ordering
45. Issuing MasterCoins
• MasterCoins are not mined
• Instead, it uses a Kickstarter-like bootstrap
• The protocol designates a special
“exodus address”
– 1EXoDusjGwvnjZUyKkxZ4UHEf77z6A5S4P
– Firstbits: 1exodus
47. Issuing MasterCoins
• Willet / MasterCoin Foundation controls 1Exodus
• Funds are used to pay for the project’s
development
48. Issuing MasterCoins
• Willet / MasterCoin Foundation controls 1Exodus
• Funds are used to pay for the project’s
development
• Users get MSC reward for investing in 1Exodus
49. Issuing MasterCoins
• Willet / MasterCoin Foundation controls 1Exodus
• Funds are used to pay for the project’s
development
• Users get MSC reward for investing in 1Exodus
• Investment period – August 1-31, 2013
50. Issuing MasterCoins
• Willet / MasterCoin Foundation controls 1Exodus
• Funds are used to pay for the project’s
development
• Users get MSC reward for investing in 1Exodus
• Investment period – August 1-31, 2013
No new MSC after Sep 2013
57. Project Status
• 2,138 BTC raised (1,222 belong to Willet)
• Economic features debated
• Software development started
– Experimental!
58. Project Status
• 2,138 BTC raised (1,222 belong to Willet)
• Economic features debated
• Software development started
– Experimental!
• Control of 1Exodus undecided
(currently Willet sole controller)
59. Roadmap
• Sep 2013 – fundraiser ends
• Design website, logo
• Implement core features
• Experiment with user currencies
60. New Features
• MasterCoin is a platform
• Its “killer feature” might be unknown yet
• New features will be added in the future