Making History With Distributed Exchange

News for the week 43.2013.

Last week we discussed the fantastic results of the 1st code contest. Throughout this week a few key exciting events took place.

J.R. Willet, the person behind the Mastercoin protocol, announced the 2nd code contest which aimed at enabling distributed exchange transactions between two currencies (BTC <-> MSC); this ambitious contest is giving away 300 BTC and will need support not just from those who will be developing the wallet and website applications, but support from those who are willing to test the developed applications. So, take a look and get involved. Your contributions will be rewarded.

We also saw an important decision take place with the Bitcoin code base.  According to Gavin Andresen a Bitcoin pull request which allows for the association of up to 80 bytes of arbitrary data in a transaction will make it into Bitcoin’s 0.9 major release; this will enable Class C Mastercoin transactions (more information below).

Lastly, earlier this week the Mastercoin Foundation Board had its first meeting. Scroll down to see the minutes.

Mastercoin Websites

Looking for a MSC transaction or address? Check out some of the websites that were created for the last code contest:

Mastercoin Explorer


Mastercoin Giveaway

If you did not get your hands on some Mastercoins a couple months ago, the giveaway is back up and running.  Help promote Mastercoin. Go get some coins!

Announcing the 300 BTC Coding Contest: Distributed Exchange

A few days ago J.R. Willet announced the next coding contest centered on building the distributed exchange and Smart Property capabilities of the Mastercoin protocol layer (see the latest protocol specification) which uses the Bitcoin network for data communications, storage and transactional security. With the completion of this contest we all will be able to buy and sell Mastercoins for Bitcoins, and soon other Smart Properties, by utilizing Bitcoin’s distributed peer-to-peer network as the exchange host.

We’re making history here! Join the effort as there are many roles (developers, code review, testing, bug reporting) that need to be filled and share in the 300 BTC prize.

Here is a brief on the contest requirements which can be met as part of a group effort and by using already open sourced code. Jump in by joining the development discussion thread on bitcointalk.

Acceptance criteria:

  • Minimum one PC wallet (for both Linux and Windows) which can generate simple sends and the buy/sell messages required for the distributed exchange, using agree-upon multi-sig format.
  • Minimum two websites parsing such messages, and the resulting balance transfers
  • Minimum one website showing BTC/MSC price charts derived from these messages
  • Minimum 10 days of real-world usage with no major problems
  • High bar for usability.

Repo Updates

If you are looking to contribute to the next contest or want to try out a Mastercoin wallet have a look at the MSC repositories on GitHub.

mastercoin-tools update

    • parse multisig_long and disable multisig_simple
    • change send multisig to compressed+obfuscated pubkey format
    • change to obfuscation using sender address
    • give change address in BIP11 as uncompressed pubkey

Market Update


Market Depth: BID 8,641 MSC || ASK 3,336

BID MSC 275 * 0.0800 BTC || ASK MSC 100 MSC * 0.1000 BTC

Note that trading is manual at this time. Offers are available at Maxmint’s Mastercoin Order Book

Protocol & Proposals

Bitcoin 0.9 & Mastercoin Transaction Classes

Earlier this week Gavin Andresen published Core Development Update #5 for Bitcoin outlining some of the source changes which will be making it into Bitcoin’s 0.9 major release. A key decision announced in this update will have a positive impact for Mastercoin development because it approves the merge of Bitcoin Pull request #2738 that allows for the association of up to 80 bytes of arbitrary data transactions.

Basically, this merge gives Mastercoin developers another way to encode Mastercoin data into the blockchain.  Thus, we have three transaction classes available (many thanks Tachikoma for summarizing what this means). If you would like a more in-depth explanation of Class A & B transaction types Zathras has created an appendix document to the MSC protocol specification entitled “Storing Mastercoin data in the blockchain” which details the transaction rules for these two types.

Class A

Hiding the data in an Bitcoin address. The downside to this method is that these addresses can never be spent since no private key exists and bloat the Bitcoin blockchain.

Class B

Multi-signature transactions. By supplying a public key to be used when spending the output we thus ensuring every output created is spendable.

Class C

Add 80 bytes of arbitrary data to each transaction.  A way to encode data in the most benign way since outputs are ‘Provably Prune-able’ and can safely be ignored when parsing the blockchain.

Mastercoin Transaction Example

If you are wondering how a Mastercoin transaction is encoded in the blockchain Zathras has prepared this graphic explaining how a simple send transaction appears along with Class B obfuscation:

Mastercoin Foundation

The Mastercoin Foundation is now a Silver Member of the Bitcoin Foundation.


Current Balance: 4521.9910979 BTC

More details available at the Mastercoin Fund Ledger

Board Meeting Minutes

Earlier this week the first Board Meeting of the Mastercoin Foundation took place. The board meeting agenda is available online. Outlined are the items discussed and the results.

  • Are our meeting minutes public?

We decided that the meetings are public.

  • How to engage in Press Relations?

We haven’t decided on that, waiting to hear a marketing plan from Social Circle.

  • Update on blog, social channels

Updated the board about our blog. We do also plan to review our Twitter & Facebook channels.

  • We need a roadmap. Revive our Trello board? We need someone to be in charge of the roadmap / project management, whatever the medium.

No Trello for now.

  • Do we start paying all bounties as 50%/50% BTC/MSC ?

It was decided that bounties are paid in whatever currency the developers/bounty collectors wish.

  • Share the news of Nxt

Updated the board briefly about the Nxt alt currency

  • Protocol specification

J.R. – Goal – get next revision of the spec into github.

Have something exciting to talk about?

Use this form to tell us what you are working on related to Mastercoin. We will include it in the next weekly update.

Making History With Distributed Exchange

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