Mastercoin: Blockchain Builder
by Helga Danova | May 22, 2014 | Crypto News
Mastercoin has recently gotten a lot of attention due to IPO of MaidSafeCoin, with the payment methods beings Mastercoin and Bitcoin. What makes Mastercoin different from the numerous cryptocurrencies available on the exchanges? Well the most significant is the use of layering itself on top of Bitcoins blockchain.
Now your second question is most likely “What’s the point of attaching your coin to another blockchain, instead of making your own?”. One of the biggest advantages of using a blockchain of a more secure and well-established coin is that it’s more secure. With Bitcoin’s network hash rate being measured in the petahash now, it’s going to take a lot to even make a 51% attack possible.
On top of that, Mastercoin, can be used as a blockchain itself for other coins to “bootstrap” on, or implement Mastercoins blockchain for their own currency. This isn’t a one-way road however, with people capable of making their own currencies based on the Mastercoin blockchain. Even without this major innovation, Mastercoin has plenty of other unique features. One that is especially impressive is their decentralized exchange, where Bitcoin timestamping service in their blockchain is used as the third party needed to confirm transactions.
Another quite impressive feature is the ability to reverse transactions. There are limitations, however. The most limiting ones are the fact they can only come from saving addresses, and you can only reverse transaction in N days, with N being defined per address. Saving addresses, as mentioned above, is another feature that is exclusive to Mastercoin. It essentially functions as an ordinary address, except that you can reverse transactions, in an N amount of days.
This works in conjunction with another type of address, called a guardian address. If a transaction reversal is needed, say in case of wallet compromise, a guardian address can send a special kind of transaction that allows a transaction from the saving address to be reversed. Instead of going back to the savings address, it returns to the guardian address.
Mastercoin is one those coins that everyone in cryptocurrency should know. Its implementation of bootstrapping itself onto Bitcoins blockchain, makes a strong association between Mastercoin and Bitcoin. The ability to include services, commodities, etc. on top of Mastercoin just strengthens that association, increasing adoption of Mastercoin and Bitcoin.
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