A Brief History Of Mastercoin

Mastercoin Foundation Vision Statement:

Accelerate innovation throughout the world by building a global value exchange platform in an open, decentralized, transparent way.

Mastercoin Foundation Mission Statement:

To become the standard protocol for smart properties and virtual currencies on the Bitcoin network by providing peer-driven development of Mastercoin-enabled distributed applications that are easy to use, secure, and decentralized.

The Idea of Mastercoin

“The Second Bitcoin Whitepaper” (version 0.5) written by J.R. Willett and made public in January of 2012 laid out the basic ideas behind Mastercoin proposing that the existing Bitcoin network could be used as a protocol layer for higher level protocols to enable new rules for contracts thus enabling the creation of new currencies without changing Bitcoin itself or requiring the creation of an alternate blockchain to handle new rules. If you are familiar with the OSI protocol stack the relationship between Bitcoin and Mastercoin could be visualized as such:

The rationale behind J.R. Willett’s proposal addressed several issues: improve the stability of Bitcoin through the issuance of new currencies which have evolved into Contracts For Difference; benefit Bitcoin holders by adding new value to the Bitcoin network; provide a mechanism by which to fund software development, marketing and maintenance of the new protocol layer(s); and provide for a way by which early adopters would benefit financially.

With this new protocol layer, Bitcoin users could go abóut creating new smart contracts within the Bitcoin ecosystem.  The smart contracts protocol enabled via Mastercoin encapsulate the facilitation, verification and enforcement of contracts thus enabling the electronic exchange of smart properties such as: stocks, bonds, real estate, intellectual property and so forth.

The following year on July 31, 2013 v1.0 of the same whitepaper was released and included a call for funding the Mastercoin project. A Bitcoin “Exodus Address” was created and anyone sending Bitcoins to this address before August 31, 2013 received 100X that number in Mastercoins, as well as extra Mastercoins depending on the week during which the send transaction took place.

Exodus: Moving from Idea to Funding

July 31, 2013 marks the inception of the fundraiser the Mastercoin project when J.R. Willett’s idea moved one significant step closer to reality.  On August 15th the first ever Mastercoin transaction was recorded when CryptoBegger was sent 1 Test Mastercoin.  To this point the 1EXoDus address had received significant investment from Mastercoin’s founder and other individuals, however the big push came a presentation of Mastercoin to BitAngels in the middle of August 2013.

The total funds raised peaked at approximately 4740 BTC which resulted in the creation of about 563,162 MSC and another 10% of that initial amount in development Mastercoins will vest over a period of time.  No more MSC will ever be created from the 1EXoDus address.

Mastercoin Foundation and Board

The Mastercoin Foundation came to existence in September 2013 with seven volunteer Board members:

  • Ron Gross

  • David Johnston

  • Brock Pierce

  • Antony Vo

  • J.R. Willett

  • Jonathan Yantis

  • Sam Onat Yilmaz

Today the role of the board is to guide strategic decisions and partnerships, approve bounties as suggested by the community, as well as oversee the general budget and the hiring of operational staff.  The board is actively working to minimize its temporary central role in the Mastercoin protocol – both controlling the Mastercoin Spec, and awarding bounties, is scheduled to be turned over from the board to full community control via Proof of Stake voting. The holders of Mastercoins will be able to fully control the evolution and development of the protocol and associated software.

If you wish to reach our board members for a discussion or proposal send an email to info@mastercoin.org.

The Bounty System: 1st Code Contest

On October 15, 2013 the final awards were announced on bitcointalk.org for the contest participants.  The winners will share in a prize of 180 BTC or about $25,000 at the time. Five developers split the prize for this contest and some of the main Mastercoin websites and GitHub code repositories in use today were established.

Here is a list of the applications, websites and libraries which resulted from the contest:

Mastercoin-ruby: A ruby library to parse MasterCoin data. Source

Masterchest Library: A .NET DLL that gives potential new mastercoin developers the ability to use functions with a single line of code. Source

Masterchest Engine: A blockchain scanning & mastercoin transaction processing engine. Source

Mastercoin-tools: Package of mastercoin related tools including tx parser,web UI and APIs; uses package sx, libbitcoin. Source

Mastercoin-explorer.com: A Ruby on Rails application to index all Mastercoin transactions and show other data. Source

Mastercoin-wallet: A (QT-based) Mastercoin thin-client implementation. Source

Masterchest.info: a block explorer for displaying mastercoin transactions and address balances/history. Source

Masterchest Wallet: a desktop wallet for mastercoin. Source

Masterchain.info: web UI for mastercoin-tools. Source

Distributed Exchange Code Contest #2

The current contest is aimed at developing the first commercially viable and scalable distributed exchange on the Bitcoin network allowing owners of Mastercoins and Bitcoins to trade.  Later on this capability will be extended to Smart Properties such as stocks, bonds, currencies and other financial contracts.  The contest will award out a total of 300 BTC, which originally was valued at around $50,000 at the start of the contest, but has risen significantly since.

The capability is not simply a pipe-dream, our developers have already conducted the the first distributed exchange using Test Mastercoins and Bitcoins.  The acceptance criteria and thus the milestones for this contest are the following:

  • 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-signature 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.

Mastercoin Gets an Executive Director

Ron Gross is an early investor in Mastercoin having participated in the August 2013 crowd-funding event and a founding member of the Israeli Bitcoin Association.  After dedicating a few months to the Mastercoin effort Ron was asked by the Mastercoin Board to step up to the role of Executive Director in November 2013.  You can read Ron’s acceptance letter here.  Since taking on the role Ron has taken steps to rally a large number of individuals from across the world to join the development of and realization of the Mastercoin vision.

Mastercoin Today

The group of individuals contributing to Mastercoin today easily numbers in excess of thirty people.  While there are several developers working on the Distributed Exchange contest and more developers are joining the Mastercoin open source community. From an operational standpoint we have recently added Taariq Lewis as the Smart Property Lead, Aric Fedida has joined as Head of IT and Dominik Zynis as Head of Communications.  We have a large group of people helping in areas ranging from documentation, project management, development of the Mastercoin protocol specification, communications media (videos and Web), and opening local Mastercoin chapters. We also have blogs in Chinese and Hebrew, and many more languages coming soon.

Currently, there are four Mastercoin chapters in: one in China, one in the USA, one in the UK and another in Israel.  If you are interested in forming a chapter check out the direction on our wiki.

Mastercoin and the Future of Bitcoin Commerce

Mastercoin’s vision is to “Accelerate innovation throughout the world by building a global value exchange platform in an open, decentralized, transparent way”. That can be achieved by enabling investors, entrepreneurs and workers to freely exchange knowledge, time, effort and money globally.  With that in mind we have set milestones after the Distributed Exchange functionality is in place to bring about new capabilities inherent within the Mastercoin protocol that will capture value creation in a global context, in particular:

  • Create and track “Property creation” logic (stocks, bonds, deeds, financial contracts) and integrate with distributed exchange

  • Create and track “Savings Wallet” logic

  • Create and track “Data Stream creation and display” logic

  • Create and track “Distributed Betting” logic

  • Create and track “User-Defined Currency” logic

  • Create and track “Distributed E-Commerce” logic

A Brief History Of Mastercoin

Aric, Dominik and Taariq, welcome to the team!

This has been long overdue.

I’d like to officially announce two great nominations we made in the last weeks and months.

Dominik Zynis (prophetx) has officially been chosen as our Heads of Communications. He has been managing our blog and social channels for quite a while now, and is doing a terrific job condensing the plethora of things going on with Mastercoin into a more digestible form.

I remember how valuable this was for me before I decided to spend 120% of my own time on Mastercoin – there was simply no way to follow everything that’s going on. Dominik is making it possible for people to identify and learn the important bits and pieces about Mastercoin, and is doing a terrific job at that.

Aric Fedida officially joins the team as Head of IT. Aric has been a longtime Mastercoin supporter. Back in August-September, he quickly setup up our wiki for us, has fought against its increasing spam levels, and has generally been very helpful. Since then, with our accelerated activity, our IT needs have accelerated as well. We are now supporting not just a lot more activity in the global Mastercoin Foundation, but also five chapters (and growing rapidly!). Aric is what makes all this growth possible.

David has already announced and congratulated Taariq Lewis‘ new nomination as Smart Property Lead, and I would like to join him. I think Taariq is a superb SP Lead, and am excited to see how he leads this important feature in the upcoming weeks and months.

Aric, Dominik and Taariq, welcome to the team!

Meet Ups and More Mastercoin Bounties

Week 47.2013

Big things are happening and we need your help.  But before we get into that we have a video of Ron Gross, Mastercoin Foundation’s Executive Director, speaking about Mastercoin at the Mastercoin Israel meet up which took place earlier this week.

 

Now that you had a chance to watch that video and know all about Mastercoin, you’re ready to kick down some bounties!

Earlier today we kicked-off the first Documentation Contest with a $5000 Bounty.  We also have a few other bounties open as well as several job opportunities.  And if you have some great ideas we also now how a process for proposing bounties as well.  If you need some more ideas check out the slides form Ron’s presentation.

Mastercoin Slides

If you are into the 300 BTC Distributed Exchange Code Contest taking place right now we have a list of all the GitHub repo’s which have been updated.  Head over to the development thread on Bitcointalk.org to see how you can help in development or testing.

We now have local chapters in New York, Israel, UK and China. Thank you to those who made this possible.

Active Bounties

Check the Bounty spreadsheet for links to these opportunities.  If you decide to take on a bounty and recommend a bounty give some thoughts the responsibilities of what it means to being a feature owner.

Bounty Name Bounty Size Currency
Spend from Multisig 1500 USD
Localization of at least one client 500 USD
Document a rough plan to migrating off the Bitcoin blockchain into a new altchain (possibly merged mined) 300 USD
Economic research – why does MSC have value? 500 USD
First peer reviewed academic paper about Mastercoin 1000 USD
Get an existing nonprofit organization to accept Mastercoin 200 USD
Build a budget website 1000 USD
Write spec for voting on Bounties 250 USD
Write a white paper for BitAngels on how to use the Mastercoin Smart Property / User Currencies to list a BitAngelscoin 1000 USD

Have some great ideas?  Voice yourself.  And see our Bounty Process.

Open Positions

See the Open Positions List on Trello.

Currently looking for:

Security Auditor
Chief Financial Officer
Executive Assistant
Social Media Analyst
Project Manager

Protocol & Proposals

The Mastercoin Protocol v1.2 master repository on GitHub

Proposal for Standardizing the Distribution Rate of Dev MSC via the MSC Protocol

Code Repositories

Below are the repo’s on GitHub which have been updated recently.  Click on the link for more details.

Mastercoin-tools

Mastercoin-charts-app

Mastercoin-teampage

Mastercoin-wallet

Mastercoin-faucet

Mastercoin-ruby

Mastercoin-explorer

If you are interested in project statistics head over to Ohloh.net

Market

MSC Price Chart as of 22-NOV-2013 :

chart_1 (3)

(X-axis: time; Y-axis: Price of 1 MSC in BTC)

Note that trading is manual at this time, a list of contacts is in the Order Book spreadsheet.

Community

The Mastercoin community is expanding rapidly, here are some of the sites where you can find us and join in the conversation:

/REDDIT

BITCOINTALK.ORG

MASTERCOIN CHINESE BLOG

FB GROUP

FOUNDATION ON FB

GITHUB

GOOGLE+

MASTERCOIN ISRAEL BLOG

LINKEDIN

QUORA

Events

Ron Gross, Executive Director, Mastercoin Foundation will be speaking at Inside Bitcoin taking place in Las Vegas December 11-13.

Local Chapters

We now have local chapters in New York, Israel, UK and China.  Thanks to all who made this possible:

Israel – founded by Ofer RotemStas Oskin and Amnon Gilboa.
China – founded by Red Li and Zhen Li.
UK – founded by Eric Benz.
New York – founded by Jeffrey Parries.

Interested in starting your own local chapter here are the instructions.

Mastercoin Foundation

Smart Property Lead

We are excited to announce a new addition to the team: Taariq Lewis recently took on the Smart Property Lead position.

Financials

Mastercoin Fund Ledger (MSC) 10071.6150979
Exodus MSC 563162.35762218 End of Exodus 9/1/2013
Dev MSC 56316.235762218 Years since Exodus 0.22569854646742
Total MSC 619478.593384398 Available Dev MSC 8155.66935554026
Mastercoin Primary Fund Ledger (BTC)
Beginning Balance 4740.6200979
Overall Balance 4436.2910979

Source: Fund Ledger

Meet Ups and More Mastercoin Bounties

Calling All Writers: Mastercoin Documentation Contest – $5000 Bounty

logo mscThe first documentation contest is underway and we are looking for people to contribute.  Our goal is to crowd-source world-class documentation of all things Mastercoin for our Wiki.

For inspiration we would love if the Wiki content is on par with the professional approach of these: Ripple Wiki, Bitcoin.it Wiki, or Blockchain.info API documentation and Blockchain.info Support.

Goal:

Document as much as possible by using social media channels to obtain the best, crowd sourced content.

Bounty:

The total bounty will be $5000.  Contest ends December 3, 2013 at Midnight GMT.

Rules:

The bounty will be divided up by number of pages posted to the Wiki.   Only QUESTION (#1), ANSWER (#2) and WIKI (#4) tasks are paid and split equally.

Anyone can work on an item so if you only do #1 or #2 or #4 then you will only get 33% credit so long as it is completed and gets through #4; the only exception is when there are translations involved.

For example, if 50 pages are posted each page gets paid out $100, if you did four #1 tasks of Trello items that were posted in English and translated into Hebrew then you will receive $100.

$5000 / 50 = 100, $100 / 4 = $25, $25 x 4 = $100

Get Started:

Start out on the contest’s Trello Board, we have seeded it with several topics.  You can log in using a google account or set up an account.

If you do not see a question or subject matter that you want to work on, post a comment here describing the subject or question, please keep it simple (i.e, What is Mastercoin; Mastercoin Links; Constructing a Transaction; Transaction Processing).

We are paying out on content already submitted. If you already have content on the Wiki you should post a comment on the Trello board with a link to the content.

If you are translating into a second language, make a comment on the Trello item so you get credit (make sure to include a link to the wiki article in another language).

Directions:

    1. QUESTION: Post a link on the Trello Card to at least one question on Quora or bitcoin.stackexchange.com or some other location on the Internet.  Once this is done one of the Admin’s will move it to the Answers list.  If the Question does not exist, post a comment in the card titled “POST MORE QUESTIONS HERE“.

2. ANSWER: When you get some answers (you can answer your own question, but the purpose is for it to be a community effort) pull together the content you believe should be used for that particular item and post it to the Trello Card.  Once this is done one of the Admin’s will move it to the Voting list.

3. VOTING: You must get 3 Votes on your Trello Card and no one making an absolute objection to your content.  We will ask the developers and the Board members to vote.  Feel free to post on bitcointalk.org.

4. WIKI: Once the content is up-voted someone will need to obtain a log in to the Mastercoin Wiki and add a page with the content.  Then put the wiki link into the Trello Card and post on the contest discussion board on bitcointalk.org that you are done.

Contest will end  at midnight GMT on December 3, 2013.

Please post questions here as a comment and they will be answered within 24 hours.

Calling All Writers: Mastercoin Documentation Contest – $5000 Bounty

Our Bounty Process

We are still discovering and evolving what is the right development process for Mastercoin … I imagine things will look quite different 6 months from now. For now, I wanted to document how are process is happening right now:

  1. Anyone can add a new task to any of our Trello boards. Whatever you think needs doing – just add it, and post a message notifying us of this new task (if you need Trello permissions, let us know).
  2. We propose bounties on the tasks we think are most important right now. We add this information on the card, and update the Opportunities thread (subscribe to it to get notifications). I have also created a new spreadsheet that will contain all specific open bounties (not counting special contests like the 300 BTC contest and the upcoming Documentation Week).
  3. You can pick any card on Trello, with or without bounty, and work on it. If you are satisfied with the bounty we currently placed on the card – great! If you feel that the bounty amount is too low for a particular card (or isn’t even specified), let us know! We are completely open to discussing changes and “upgrades” for any bounty. It would be best to discuss these propositions on top of the cards themselves, on Trello.
  4. Once you complete a bounty and your results are validate, we send you the awarded amount. It’s that simple.

This is the process under which we’ve been operating on. My primary mission is to accelerate the development of Mastercoin, and I noticed that so far only I was issuing bounties. I am here to tell you – please, let us know what you want to work on, and at what price. We may not always agree to your terms, but we will always be open to discussing them.

For your information we assume that most bounties will be picked by people who already own some mastercoins (or prefer to be paid in MSC), and so we will be offering lower-than-market prices on most (but not all) bounties.

As always, you can come to us with any questions and discuss.

Looking forward to everyone’s increased participation in the bounty process,

Ron

Our Bounty Process

Proposal for Standardizing the Distribution Rate of Dev MSC via the MSC Protocol

I propose we formalize the distribution of “Dev MSC”, to mirror the amount of Dev MSC generated each month. Further more that these Dev MSC be distributed in proportion to the amount of BTC won by participants in Mastercoin bounties that month. With the intension being, that this distribution process will be fully controlled by the Mastercoin community via the existing Bounty system and up coming Proof of Stake voting.

It seems a simple and elegant distribution curve, and is awarded in proportion to the the BTC anyone earns or wins as part of working on the Mastercoin implementations, competitions and bounties. That way everyone can be confident in how this gets distributed and earning some of the Exodus funds comes with an automatic bonus of earning a proportional amount of Dev MSC.

Lets talk some simple math here.

Simple Dev MSC Distribution Equation:  A / B = C * D = E
(A) Amount of awards an individual earns in BTC during a 30 day period, divided by,
(B) the total amount of BTC awarded during that 30 day period, equals
(C) his or her individual award percentage, times
(D) the total Dev MSC generated during that 30 day period, equals
(E) the amount of Dev MSC awarded to the individual in addition to his BTC awards during the 30 day period.

Example #1 (using round numbers):
A (100 BTC) / B (1,000 BTC) = C (10%) * D (1,000 MSC) = E (100 MSC)

There are 56,316 Dev MSC that will ever be generated.
28,158 Dev MSC will be generated this year or 2,346 MSC each month.
So if a developer won 10% of the bounties this month he or she would earn 234.6 Dev MSC (worth 35.19 BTC / $24,633 USD at current MSC / BTC / USD prices).

The benefits of using this method should be obvious.

1. Market Confidence: Having a standard and predictable amount of Dev MSC coming onto the market each month removes any need to “guess” about the current amount of Mastercoins in circulation and removes any worries about a large number of Dev MSC being released into the market at unexpected times (the Fed watching / Ripple problem).

2. Simplicity: This mechanism removes the need for devising a complex system for how much Dev MSC should be vested and to whom, and any potential conflicts of interest that would come with developing such a complex system. We already have a bounty system rewarding those contributing value, they should also be vesting Dev MSC in proportion to the value they are contributing to the community via the existing bounty system.

3. Community Driven: The Exodus address BTC funds will be controlled by the community Bounty system and the Proof of Stake voting, so it seems logical that the Dev MSC should also be controlled by the community Bounty system and Proof of Stake voting and be vested to those adding value in proportion to their contributions.

4. Developer Confidence: A number of developers are spending more and more time contributing to the Mastercoin implementations and with a standard for the amount of Dev MSC to be distributed, they can have a strong level of confidence that investing their time, talents, and energy in Mastercoin will provide a predictable income stream for their work. Additionally as the value of MSC increases over time, (in conjunction with the increased demand for /utility of Mastercoin) the Dev MSC monthly rewards will increase in BTC / USD terms and thus attract more and more developers each month to participate in bounties and competitions. Already that monthly 2,346 Dev MSC is worth almost $250,000 USD at current MSC / BTC / USD prices. That’s $3,000,000 worth of Dev MSC to vest with Developers this year (at current prices).

I’ve discussed this proposal with the Mastercoin Foundation Board and I’m posting here to get feedback from the community on the best way to implement this as part of the Mastercoin Protocol Spec.

BACK GROUND FOR THOSE THAT HAVEN’T READ THE MASTERCOIN SPEC 1.2
There are two main types of Mastercoins. MSC and Dev MSC (there are also Test MSC, but I won’t get into those here). All original Mastercoins (MSC) were generated between August 1st and August 31st by all those that sent funds to the “Exodus Address”, these total 563,162. In addition the Mastercoin protocol generated 10% additional Dev MSC (originally termed Reward MSC) which total 56,316 Dev MSC. Combined you get all the Mastercoins that will ever exist 619,478.

Here is the reference from the Mastercoin Spec:  https://github.com/mastercoin-MSC/spec
“For every 10 Mastercoins sold, an additional “dev Mastercoin” was also created,”

The generation of these Dev MSC is controlled by an algorithm described in the spec.
“Which are being awarded to the Exodus Address slowly over the years following the fundraiser. These delayed Mastercoins will ensure that we (the Mastercoin Foundation) have funding to complete the features desired by users. The reward is be structured so that we receive 50% of the reward by one year after the initial sale, 75% by a year later, 87.5% by a year later, and so on”. Here is a Google Doc that has been public since the beginning of the project simply calculates how many Dev MSC are available for Distribution each year. https://docs.google.com/spreadsheet/ccc?key=0AmR_eSvAkuXSdDI3Y1JnVjFvUDBXOWZiZl8zZ2Rkamc&usp=sharing

You can see the current total of the accumulating Dev MSC here: https://docs.google.com/a/bitangels.co/spreadsheet/ccc?key=0AtCyUJvk_IyNdGpVcnpBN2tOczFmbVRnck5TWjZuRFE#gid=1

8,080 MSC generated so far with 6,580 not yet Distributed via a bounty.

There isn’t a description in the protocol on how the Dev MSC are to be distributed or at what rate.

I look forward to everyone’s input.

David A. Johnston
Executive Director of BitAngels.co / Board Member of the Mastercoin Foundation

Proposal for Standardizing the Distribution Rate of Dev MSC via the MSC Protocol