Mastercoin, which is now better known as Omni, is a digital currency that tries to add another level to the Bitcoin blockchain. The communications protocol that it uses is supposed to enable complex financial functions in a cryptocurrency. Bitcoin was pretty uncomplicated when it came out and it did not have any tangible assets to its name. Mastercoin was also supposed to change that by adding another layer to Bitcoin protocol allowing for other altcoins using Bitcoin’s blockchain without needing to build new infrastructure.
The basics of Mastercoin protocol was released as a white paper in 2012. After gathering momentum, the Mastercoin project was launched back in 2013. It started with a fundraiser that allowed anyone to buy Mastercoins using bitcoins. The idea was that as the platform, the tokens would increase in value and investors could sell their Mastercoins to get a profit. Around $500,000 was raised to give the cryptocoin initial funding.
As one of the first successors of Bitcoin to appear, Mastercoin managed to catch the attention of many people. By February 2014, Mastercoin was the world’s seventh largest cryptocurrency by market capitalization.
Mastercoin has three interesting features. First is the use of its distributed exchange. This exchange allows traders to do Bitcoin transaction through the Mastercoin layer. Since Mastercoin is open-source, developers could add new features that are tailored to specific needs. This includes personal money transfers, payment fulfilment, issuing user currencies and more.
The second feature is that it has blockchain price feeds that can be used to publish price data for virtual currencies. This makes it easier to do cross-currency trades. Finally, Mastercoin has an added layer of security against fraud since it saves addresses and bolsters security for large savings accounts.
A new name
In 2015, though, the people behind Mastercoin decided to rebrand. Renaming the cryptocurrency and the protocol, Omni, the foundation running it was facing difficulties. Its competitor Counterparty managed to contribute to its decline and the cryptocoin struggled to remain relevant.
As the only crypto 2.0 protocol that had a tested platform that can support ambitious projects like decentralized recordkeeping network Factom, decentralized Internet provider MaidSafe and currency-backed token project Tether, Omni was pushed forward to change in the evolving marketplace.
Omni, formerly the Mastercoin cryptocurrency has managed to survive the change the though and has become an ideal platform for those who want to create their own virtual currencies and blockchain-based apps.