Dear Masterminds,

It’s been another exiting and  productive week. Mastercoin is blessed and priviledged to provide a platform for so many innovative projects

Today, I would like to introduce you to Crypto Next:

Crypto Next plc is an Isle of Man company that offers digital currency products starting with a multi-currency, multi-lingual exchange platform and extending to merchant and remittance services.  It is the first company to launch an exchange offering multiple Fiat and multiple digital currencies, via a platform which is available in several languages.

Their mission is to bring digital currencies to grassroots level by designing a user-friendly system that is simple and intuitive. They also offer white label exchanges and merchant payment systems, thereby hoping to facilitate the widespread use of digital currency.

Crypto Next released a coin in July 2014, the Crypto Next Coin (CXC), based on the Mastercoin protocol.  CXC is a token that can be used in lieu of fees on Crypto Next’s digital currency platforms, potentially saving users a fortune in trading fees.

For more info on CXC, please see Crypto Next’s video

If you want to learn more about Crypto Next, please visit: www.cryptonext.net

Dear Masterminds,

Last week I attended the Inside Bitcoin Conference in London.

I must say – WOW – Mastercoin was heard, mentioned and discussed all over.

I met many teams that already launched and those that are going to launch their projects on the Master Protocol soon, such as Lazooz, Factom- Notary Chains, MerchantCoins, Maidsafe, API Networks, etc.,

Mastercoin earned its popularity with hard team work, great leadership, huge  progress of the Master Protocol, ability to facilitate great innovative projects, providing  an almost  24/7 support – thank you Mastercoin team!

People I met at the conference knew a lot about Mastercoin and therefore, the discussions were mostly focused on finding ways to cooperate, partner and facilitate the Master Protocol.

Today, I would like to introduce you to  SovereignCoin

What is  SovereignCoin? –  SovereignCoin is a Silver Backed Coin

The mission of SovereignCoin is to harness the purchasing power of physical silver, to energize and mobilize this tremendous resource, by anchoring to it a trading unit called a Sovereign. A Sovereign is a digital representation of one gram of silver utilized by SovereignCoin holders to record and reconcile value. No longer need the purchasing power of silver be trapped away inside one’s vault.

A Sovereign from the SovereignExchange has already existed for many years but now with the advent of cryptocurrencies and Master Protocol SovereignCoin is about to be born to aid in the secure and seamless transaction of this digital representation of a gram of silver.

Every Sovereign is 100% secured by physical silver, allocated and insured with a private bullion depository. At any point, members may tender their Sovereigns with The Sovereign Exchange Treasury and take delivery of 99.9% pure investment-grade silver. Gold denominated Sovereigns are also available.
The website is still under construction, meanwhile, if you want to know more please visit:

http://thesovereignexchange.com/content/sovereign-solution

Great things are happening to the Master Protocol

Point of contact for companies and organizations who want to issue a token

(Judith Jakubovics) Judith (-at-) Mastercoin.org and on Skype: Judith.Jakubovics

Hi folks,

Faiz here providing you with a weekly update. Most of this is old-hat but we’ll run down the major items in case anyone isn’t aware.

0.0.7 Tag

0.0.7 release for Mastercore has been put out in a tagged and binary form, you can get those below

• Tag: https://github.com/mastercoin-MSC/mastercore/releases/tag/v0.0.7
• Binaries: https://github.com/mastercoin-MSC/mastercore-binaries/releases/tag/0.0.7

Omniwallet migration

As Adam noted a new Omniwallet instance based on this new release has been spun up, if you can get a minute to create an account and exercise a few moments on the site to test it out, we would greatly appreciate that (currently in-development, balances and sends should work though). We appreciate all bug reports and pentesting results, if you have a moment to write a few sentences describing your issue. Development on this item continues

• Omniwallet Test Instance, please help us find bugs (Report them here) !

Mastercore Vagrant box

If you haven’t had a moment to test Mastercore, it’s fairly simple if you’re running Linux/Ubuntu using the binaries above, but in the case you’re not, head on over and try out our Vagrant box at the link below. What the Vagrant box allows for is quick and easy spin-up and tear-down of the Mastercore code. It was developed in-house by our team and tested by yours truly. Easily the fastest way to have a running Mastercore node to test or deploy if you are using Windows or Mac OSX.

• Download the zip here, and follow later instructions to run!

Crowdsourced testing of 0.0.7 tag

We’re working on test plans behind the scenes to rigorously analyze and identify potential faults and corner-cases for the Mastercore 0.0.7 codebase. This includes whitebox and blackbox testing, fuzzing of inputs, and unit testing. If you’d like to give feedback the link below, we’re calling it the “Crowdsourced Testing” approach.

• Crowdsourced Testing – Please contribute!

Wrap-up

A few notes about consensus… Within mastercoin-tools/Omniwallet a regression was found and fixed last week that incorrectly interpreted the buyer’s fee when parsing a buyer’s Distributed Exchange Accept. That fix is live and details/code can be found here.

I’m also collecting feedback on the future of Mastercore’s Metadex RPC layer. If you have any relevant feedback, are a trader, or wish to see some functionality in the RPC, please do comment and explain your motivations in the document below.

• Metadex RPC Document – Please contribute!

Thanks again for another exciting week, look forward to hearing back from our readers and audience.

Have a great weekend!

To be the leader in Bitcoin-based financial platforms, you need adoption, and to get adoption, you need utility, features and ease of use. While we have a number of innovative projects being launched using the Master Protocol as it has been developed over the past year, we still need enhanced features, additional flexibility and robust security to the users.

A proposal for distributing application-level metadata in a global format has been proposed,
which if implemented would reduce the amount of metadata storage required for Smart Properties on the Bitcoin blockchain (and slimmer is better for the whole ecosystem). Please read this and provide comments.

Asset issuers have been asking for more control over the assets they create. Not only the ability to create assets on demand, but also the means to manage those assets, and transfer ownership of those assets. The learning curve on decentralized financial assets is pretty steep, we’re finding that people are now starting to “get it” – and the foundations that have been built are exactly what issuers need to build upon and make the next killer app.

The MetaDEx is getting closer to release, taking oodles of input from experts and making it beautifully simple to execute.

The Over-under

Prepping a new software release brings the contributors together to determine the best fit for new changes, discussion surrounding caveats and edge cases, and what the changes will impact going forward.

Next week we will release the next tagged release of Master Core for integrators, version 0.0.7.

This will be the last tagged release before we build and distribute the next beta of Master Core that will include the front-end user interface for the downloadable wallet (and, of course, multiple platform support). This tagged release is to provide integrators with the most up-to-date protocol enhancements and to make sure they will be ready for the users using the forthcoming beta.

The deep

In preparation for next week’s new tagged release of Master Core, this week the team has been busy merging in the remaining code and running unit tests and black box testing against the critical functions.

So far, we’ve tested and approved p2sh multi-sig and manual issuances after thorough testing on Bitcoin testnet. Re-org protection was merged yesterday and today (and throughout the weekend), we’ll be making sure that the daemon remains stable and accurate (as it has been up to now). The re-org protection allows Master Core to recover better from a blockchain re-org, whereas the prior builds provided a warning to the user, but did not automatically reparse.

A side-refactoring of the file structure of the code was also made yesterday to allow for smoother merges of new features in the future.

The skinny

Omniwallet got some major updates this week, and over the weekend will be getting even more, related to Master Core integration, the new database backend, and front-end UI updates. Part of getting the new builds of Master Core out have been to assist in getting the old underpinnings of Omniwallet removed and replaced with the reference client. The same is happening for masterchest.info, which by next week will also be running against Master Core. All of this in preparation for new asset types, faster and more responsive services and more detailed data to be presented to the end-user.

Next week integrators get a lot. Shortly thereafter, the UI will be ready, and everyone will be able to see it.

See areas of improvement? Have any questions? The more masterminds the better! Join the project. Ask me anything!

Craig Sellars

CTO, MSC Foundation

craig (at) mastercoin.org

Good Afternoon Masterminds,

Recently a member of the MSC Reddit community (yandi23) asked me to address this question: “When can you make a post on the liquidity of Mastercoin?”

Thanks for the question yandi23. I’ve been working up plans on how the community can build up the liquidity of MSC and so your question is well timed and I work to address it in detail below in this post.

TL;DR
Utility is what gives a token organic demand, which in turn drives increased value and liquidity in a market. The first feature creating direct utility for the MSC token is the Meta Decentralized Exchange (Meta DEx). As more tokens are listed on the Master Protocol and MSC is required for the common trading pair on the Meta DEx, organic demand for MSC will build and the market cap and liquidity will be a reflection of the level of this organic demand. Here is the link to the OmniWallet feedback Google Doc if you want to add your suggestions or report bugs to enhance the utility of the DEx and soon the Meta DEx. https://docs.google.com/document/d/1LgDz4Z_kb_WIRE9kpv-iGivgBHT2JiekemhzZcET9d8/edit?usp=sharing

Happy testing : )

Context and History:
Lets start by examining the past. In the beginning, at the founding of the Bitcoin network, the bitcoin tokens had virtually no utility and thus no demand for the use of its token and as it logically follows, no liquidity in the market.

As more users acquired bitcoins and began trading them among themselves, eventually offering to purchase goods and services with their bitcoins, the utility of the bitcoin token began to materialize as a payment network. It took several years before the utility of bitcoin grew enough for a meaningful market price for the tokens to emerge and even then the small market cap and liquidity of the Bitcoin network really limited the use of the bitcoin token to fairly small purchases of real world or digital goods.

As user growth continued an organic process of building the market cap and liquidity of bitcoin emerged and resulted in many exchanges actively listing it for trade, many professional traders coming into the market, a large ecosystem of merchants accepting it, and users holding bitcoin over the long term as a store of value.

The Path for MSC:
In many ways the Master Protocol has been on a similar journey the past year. Since the crowdsale last August the MSC community has been working to build the reference client (MasterCore) and users have begun issuing tokens on the platform as of April 22nd 2014 (MaidSafe, API Network, soon Merchant Coin, Real Coin and many others).

Since the launch of the Decentralized Exchange (DEx) feature, users have been able to trade MSC and BTC with zero third party exchange risk and extremely low fees based on bitcoin dust level transactions.

The next step is to extend the Meta DEx feature to support all user issued tokens on the MSC protocol to trade against MSC as a common trading pair. Finally the world will be free of any future “Gox” type event because this feature will permanently remove third parties from the trading equation and bring a full P2P architecture into reality.

The launch of the Meta Dex is the first time that anyone has an organic reason to purchase MSC (to use as the common trading pair) and thus the first direct utility the token has provided in the system. Before that time users held MSC because they believed that the MSC system would develop utility as some point in the future.

It was expected at first that every feature of the protocol (for example the creation of tokens) would require some amount of MSC, however it was decided in May 2014 that in order to avoid creating unneeded friction in the system, only those features requiring MSC for solid technical reasons would require their use. The Meta DEx is the first of the features that meets this standard.

The Math About The Importance of Liquidity:
So the reason that liquidity is key for the Meta DEx is that while the fees are limited to the dust level transactions required to run the system, if the “spread” between buys and sells are greater on the Meta DEx than a centralized exchange, then that adds a cost to the user of the Meta DEx. As liquidity increases the “spread” becomes more narrow and it becomes more efficient for the user. In our case the key to liquidity is the depth of offers on the order book.

Lets use some math to give an example. User Bob wants to purchase 1 BTC worth of XAP on the Meta DEx. First he has to grab some MSC on the DEx to buy the XAP with (since MSC is the common trading pair). If there are 10 BTC worth of MSC on the order book and the sell offers are evenly spread up the price curve, then by purchasing 1 BTC worth of MSC, Bob will have moved the price of MSC by 10%. This is a substantial move and has in essence cost Bob an extra 10% on the price of his trade.

If the order book has 100 BTC worth of MSC sell offers, then Bob’s purchase would only move the market price 1%.
If the order book has 1,000 BTC worth of MSC sell offers, then Bob’s purchase would only move the market price 0.1%

So with an order book 1,000 BTC deep, a user can easily make trades in the 1 to 10 BTC range and move the market less than 1%. Thus at this order book depth the Meta DEx becomes competitive with a centralized exchange on direct and indirect costs of conducting a trade.

At the time of writing (2014/09/11) the depth of the BTC / MSC order book on the DEx is 163 BTC between the 200 to 46 mBTC price ranges. This is an important number to watch and will need to increase toward the 1,000 BTC range for traders doing exchanges larger than 1 BTC to be attracted to using the DEx and Meta DEx.

https://www.omniwallet.org/wallet/trade

Action Items To Improve Liquidity / Order Book Depth: 
1. Educate traders and market makers on how to use the Omni Wallet Decentralized Exchange.

2. Build the API and RPC calls for MasterCore / OmniWallet according to the best practices of established exchanges for pro users to access.

3. Make the Omni Wallet API pull-able for third parties, such as Coinmarketcap.com to list all volume and price on the decentralized exchange.

4. Community testing of the OmniWallet interface and reporting suggestions to the OmniWallet team to improve the trading experience is key. Here is the link to the Google Doc for feedback: https://docs.google.com/document/d/1LgDz4Z_kb_WIRE9kpv-iGivgBHT2JiekemhzZcET9d8/edit?usp=sharing

Conclusion:
I believe we can address these fundamental drivers of order book depth and liquidity in the coming weeks and months. This is a major priority for me as the Chairman of the Foundation and generally for the DEx and Meta DEx features of the OmniWallet and MasterCore to be successful in the market.

I’ve been spending a lot of hours testing the OmniWallet and DEx features the past few weeks.

I hope you will join me in this testing and most importantly report your feedback to the devs via the Google Doc.

Best Regards,

David A. Johnston
Chairman of the Board MSC Foundation

David (at) Mastercoin.org