Please explain Mastercoin?

[IveBeenBit]

I'm not sure where this post belongs. Mods - please move if there's a better forum for this.

First off, I'm not the most technically inclined of people. I have been following the story of Mastercoin by listening to the Let's Talk Bitcoin podcast, I have read the Mastercoin whitepaper and a few forum posts around here and I still can't see how some of these things can happen. About all I understand is the sloganeering that "Mastercoin is to Bitcoin as http is to TCP."

I get it...Mastercoin runs on top of the bitcoin blockchain, I guess by embedding messages in transactions that a Mastercoin client can read.

What is this talk about people making their own currencies?

In the most recent Let's Talk Bitcoin show (Episode 64) one of the lead developers for Mastercoin was talking about how he had already written an "API coin." I have a decent idea of what an API is, but why would I want an "API coin?" What could I do with it?

Another example -- I hear about mastercoin-derived currencies that track the price of gold. How would such a thing be done? For a MasterGoldCoin, wouldn't someone have to hold a bunch of gold somewhere that backs his currency? What happens if the person is attacked like egold or the Liberty Dollar people?

I have more questions, but that should get us started.

[Tirapon]

Here's a great article:

http://bitcoinmagazine.com/7961/mastercoin-a-second-generation-protocol-on-the-bitcoin-blockchain/

I recommend basically everything that this guy writes, he knows what he's talking about and he's good at explaining things.

[grishnakh]

http://wiki.mastercoin.org/index.php/FAQ
That's a start.

Here's a presentation by Ron Gross where he gives an introduction to mastercoin:
http://youtu.be/f-udT6NVl1E

[bitpop]

Please don't get scammed by altcoins, they are usually pump and dump

[kjj]

mastercoin is a scam system where all transactions in the mastercoin system involve sending a payment to some dude's bitcoin address.

[bitpop]

Do not use it it's a fad scam

[bitpop]

If its not in one of the enthusiasts signatures like myself it's a scam
Ltc is the only closest alternative and it's still a bad investment

[justusranvier]

This is a generous as possible an explanation of Mastercoin.

https://bitcointalk.org/index.php?topic=348880.msg3741169#msg3741169