The decentralization boom has now reached the process of exchange. MasterCoin with a help of a public fundraiser made almost 5 BTC and spent it on creating a feature that would even further increase the privacy of cryptocurrency exchange.
Distributed or Decentralized
The MasterCoin team, or should I say MasterCoin’s Distributed Exchange team is as all other by-projects of MSC works around Bitcoin protocol to make another layer where new currencies and digital coins could exist using the original creation of Satoshi Nakamoto.
The concept is called CoinJoin and it arrive half a year ago on Bitcointalk forum, where it momentarily gained popularity. So, the idea here is quite elegant and based on the distributed exchange, using private signatures of the exchange sides and it works like this:
Sides agree on the amount of coins traded
Then each and every participant of the deal signs his transaction to prevent fraud
In case if sent amount of cryptocurrency isn’t signed by even one participant the algorithm would regard all of the transactions in the given deal and won’t add them to existing blockchain
Although the CoinJoin was thought as fair dealing system between two sides, but the number of participants is limited to the number of people willing to their digital sign.
The most curious are the so-called “colored coins”, which, by a more general term, are an example of “smart property”. In practice it means that one side is trading their BTC for a BTC, that actually represents real money, like USD, using miniscule amounts like 1 satoshi. That’s what I call a “BTCeption”.
The reason is anonymity. While at the beginning Bitcoin was considered an elusive beast that could not be traced, now the situation has changed radically. Almost anyone using his head, BlockChain.info and some additional information on a person he is researching, can get a clear picture of what lies on his or her target’s Bitcoin wallet.
That is why new coin developers are working further on user’s privacy. Certainly, absolute anonymity is questionable, but seeing the regulations being imposed, the small amounts of money traded this way would not be a problem in my book.
What Tomorrow Holds for MasterCoin
Since the beginning the MasterCoin’s potential was huge and new features are being thought of and implemented all the time. There are many different versions of wallets, each designed with a special set of functions.
Nevertheless, the team has decided not to chase after too many rabbits, but in contrast to the old saying, they have stopped on two wallets - a PC client and a web wallet. There will be two versions of each being developed and, if it’s not a joke, the re-wiring of the funds to concentrate on these tasks will be worked-in on the 1st of April.