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Mastercoin crypto: the story of the communication protocol based on Bitcoin, which later became Omni

In this article we talk about Mastercoin, one of the first crypto communication protocols built on top of Bitcoin, now known as Omni.

Mastercoin also used its own cryptocurrency, namely MSC, launched with some problems in 2013, through a fundraising campaign carried out on the Exodus wallet.

Two years later, following numerous criticisms, the project changed its name to Omni, as well as the token MSC became OMNI (not to be confused with the currency of the Omni Network project based on Ethereum).

Let’s see all the details below.

Mastercoin: one of the first protocols built on the Bitcoin blockchain

Mastercoin was one of the first projects in the crypto world to be launched in 2012, known today as Omni.

This is a communication protocol that works on Bitcoin, similar to how HTTP is based on TCP/IP; its purpose is to add functionality to the main layer through a simple and intuitive implementation.

Proposed to the cryptographic world in 2012 with the first draft of the whitepaper published by JR Willet, Mastercoin immediately attracted the attention of early viewers due to its technical potential.

These are the exact words with which it was presented:

“It can be used as a protocol layer, on top of which new currency levels with new rules can be built without modifications”

Actually the project has contributed to solving several challenges that are still partly current within the Bitcoin ecosystem such as:

  • promotion of network stability
  • adding value with the issuance of new currencies
  • creation of a P2P financing system
  • – development and maintenance of new protocol levels

Basically, Mastercoin operates as a “machine for minting digital resources“, with its primary role being to add complex financial tasks in the code of a cryptocurrency.

On this note, Willet at the dawn of the protocol’s birth had already planned to combine the new coins with applications for smart assets and savings wallets.

The Mastercoin era unfortunately lasted very shortly, as in a few years from its launch the project was replaced by other competitors such as Counterparty, which in 2014 partnered with Overstock and saw new entrepreneurs using its platform to release assets on the Bitcoin blockchain.

Even Tether and Factom, born in the following years, have offered flexible services in the field of issuing new similar cryptos, replacing the old project.

Today, despite Mastercoin still being operational, it is described as a dead protocol, now forgotten by most industry professionals.

The failed launch of the crypto Mastercoin in 2012/2013 and the rebranding with Omni

Mastercoin, after being introduced to the public in 2012 as a revolutionary protocol based on the Bitcoin architecture, decided to launch its own crypto MSC on July 31, 2013.

Through a private fundraising campaign, carried out with the help of the Exodus wallet, the team behind the project managed to raise about 5,000 bitcoins, worth just $500,000 at the time (100 dollars per BTC). 

The idea was that as the platform was developed, the tokens would become more valuable and investors would be able to sell their Mastercoin to realize a return.

To carry out the operation, a non-profit organization called Mastercoin Foundation was created, which would be responsible for managing the funds sent to the Exodus address.

The same Foundation has encouraged crypto market investors to bet on Mastercoin by offering a token amount of MSC 100 times greater than the amount paid in BTC, in addition to a bonus as early adopters.

This incentivization practice has been widely criticized in the following years as it led to a huge dilution of the supply, resulting in the devaluation of the MSC crypto.

Furthermore, the initial tokenomics involved the generation of an additional MSC every ten minted MSC, with the sum being allocated to the Foundation to support the management of the protocol.

Think about the fact that the coin had reached an ATH of about 187 dollars at the end of 2013, only to miserably crash to 3 dollars just a year later.

In 2015, following the decline of the native crypto of the Mastercoin project, the Foundation decided to change its narrative with a strategic rebranding under the new name “Omni”, opening up exclusively as a platform for decentralized protocols.

As part of the internal change, MSC has become OMNI, and many Mastercoin executives like founder JR Willet, CTO Craig Sellars, and board member David Johnston have migrated to Omni to support the group’s evolution.

In the end, all this did not help to lift the fortunes of the project, which ended up being forgotten by much of the cryptographic community.

Not to be confused with the new Omni Network protocol, whose purpose is to solve the liquidity fragmentation issue on Ethereum rollups through the use of an integrated platform.

Market analysis of the OMNI crypto 

As of today, the OMNI crypto; formerly known as MSC coin from the Mastercoin project, has a market capitalization of just 4.85 million dollars and a circulating supply (which is the same as the total supply) of 618,140 tokens.

After the failed launch in 2014 and its subsequent depreciation, the currency remained flat for 3 years before returning to a bubble during the bull market of 2017/2018.

At that moment OMNI managed to regain the $115 threshold just before the 2018 bear market brought prices back below double digits.

From that moment on, it has been the protagonist of a long phase of decline, with the new bull market of 2021 that this time did not help to lift the price of OMNI. 

Currently, the coin is valued at 6.8 dollars, an incredible increase of 922% compared to 7 days ago. This extreme pump is not due to a return of interest in this type of protocol, nor to an attempt by a whale to manipulate a poorly liquid and capitalized asset like OMNI.

If we look closely at the graph, we notice that the recent strong growth of the crypto occurred practically on April 11th, coincidentally just while the homonymous project Omni Network announced the genesis drop for its own cryptocurrency, also called OMNI.

It is clear, therefore, that some inexperienced traders, wanting to buy a promising project like Omni Network right away, have mistaken the ticker and bought the wrong version of OMNI.

Just two days after the announcement of the protocol working on the Ethereum rollup ecosystem, the now dead crypto OMNI has grown from $0.76 to a local high of $8.1.

Probably over time, the “investors” will realize the mistake and sell, bringing the price of the currency back below the $1 level.

The only market available to trade this token is Bitfinex.

Alessandro Adami
Alessandro Adami
Graduated in "Information, Media and Advertising", for over 4 years interested in the cryptocurrency and blockchain space. Co-Founder of Tokenparty, community active in spreading crypto-enthusiasm. Co-founder of Legal Hackers Civitanova marche. Information technology consultant. Ethereum Fan Boy and supporter of Chainlink oracles, strongly believes that smart contracts will be central in the development of society.