Bitcoin Forum

I've been thinking about investing in Mastercoin, and I have a few questions:

1. Why is 1 MSC already priced at 0.17 BTC, which is way above all other altcoins? You can't even trade mastercoins on any exchange yet. I realize that MSC has a lot of advanced features, so are investors expecting it will actually become worth more than a bitcoin? Could somebody comment on what would be a realistic upper limit for how much a mastercoin could eventually be worth relative to a bitcoin, and why?

2. Why has there been so little discussion in the media about mastercoin? The price of a mastercoin is way higher than a litecoin, but litecoin has received much more attention in the media than mastercoin. Why?

3. Is mastercoin intended to eventually replace bitcoin, i.e. like a new and improved version of bitcoin, or just to be another competing altcoin? From what I've read about MSC, I get the impression that it's actually not a separate currency at all, but more like an upgrade to BTC. Thoughts?

Speculation. I don't think it's worth the price right now.

Most people on this forum don't even understand what mastercoin is, or how it works... Let alone the media. It's not a coin like Litecoin, so that comparison is flawed. Mastercoin rides on top of the bitcoin protocol, similar to how HTTP rides on top of TCP/IP.

If it's not an alternative coin, but it's not bitcoin either, then is it intended to be like the next version of bitcoin which will be adopted by the bitcoin community as a total replacement/upgrade for bitcoin itself? If so, then presumably the expectation is that when that happens, 1 MSC will equal 1 BTC, since a mastercoin will be a bitcoin.

Am I understanding this correctly? Any Mastercoin enthusiasts want to jump in here and comment?

It's not a replacement for bitcoin. It rides on top of bitcoin. It requires the bitcoin network to function.

Now as far as mastercoin itself, in simplistic terms, it works by injecting extra data into the bitcoin block chain. It's able to do that through somewhat of a loophole that has existed for a while in the protocol... Some of the core bitcoin developers frown upon the practice.

It's entirely within the realm of possibility that they eventually close the loophole that allows mastercoin to function.

supply and demand, speculation.


i would say investors are speculating that mastercoins will be worth more than a bitcoin.


mastercoin is attempting to corner the market on commodities, currencies, assets, gambling, trading, and smart property. assume 1% of the value of these markets (conservatively $90 trillion) is soaked up by bitcoin when there are 15 million bitcoins on the market. this gives one bitcoin a value of $6 million. also assume the value of these markets can be manipulated using only the mastercoin protocol. If the 620,000 mastercoins (this being the number of mastercoins ever generated) represent the transfer of value of a bitcoin market cap of $90 trillion dollars, the question to ask is at what price will the market demand to use these mastercoins in order to transfer their wealth? this demand will represent the upper limit, and only time will tell what that will be.


same reason the media does not discuss feathercoin, namecoin, BBQcoin, etc (mastercoin is a latecomer to the crytpo party)


supply/demand of a unique commodity.



mastercoin attempts to expand the features of bitcoin; without bitcoin, mastercoin as we know it is not usable. it would be like saying, "is the FOREX market trying to replace USD?" the answer is no because the FOREX market depends on USD, that among other currencies. the mastercoin protocol is like FOREX because they are both platforms that facilitate the ease at which value can transferred.

i made a [now outdated] model of what it would be like for a user to list property for sale using the mastercoin protocol. to hopefully make the explanation more concrete, i subsituted the bitcoin protocol with a mail delivery service, bitcoins with bistamps, mastercoins with masterstamps, and digital addresses with real/non-deliverable addresses. don't worry if you don't follow along, i barely do. :)

http://imgur.com/2Q9AYWr.png


the mastercoin protocol attempts to manipulate unregulated markets using properties unique to the bitcoin protocol. the mastercoins themselves represent how much value you can manipulate using the mastercoin protocol, and as such will charge a premium.

codyave, thanks for the interesting reply.  :)

MasterCoin was just listed on Coinmarketcap.com, which is likely to pique interest. How are MasterCoins generated?