MasterCoin, Decentralizing Exchange

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