Quote from: FrictionlessCoin on December 30, 2013, 03:04:26 PM

Ok. If you want to use this analogy. So if Mastercoin is the gold, then what are the user defined coins defined in Mastercoin?

Maybe Bitcoin is the ferry, Mastercoin is the container, and the gold is in the user defined coins.

There is a distinction to be made between the Master Protocol, Mastercoins (MSC) and additional currencies that live atop the Master Protocol.

Quote from: FrictionlessCoin on December 30, 2013, 03:04:26 PM

What value does one place on this 'mastercoin' gold. We know the value of bitcoin is based on the energy and resources to extract a bitcoin. How much did it cost to extract this Mastercoin gold?

MSC are standalone, finite units of exchange that obtain their value based on the market. The cost to extact this Mastercoin gold started with the Exodus address contributions, at which point they float as a separate unit of exchange.

Quote from: FrictionlessCoin on December 30, 2013, 03:04:26 PM

Also, what is the utility of this mastercoin gold? if one master coin can contain the same number of user defined coins as 100 master coins, then what is it worth?

The utility is in the protocol itself. Since MSC have already been defined as a unit of exchange that can live within the Bitcoin blockchain, a similar methodology can be employed to allow for additional finite units of exchange to be represented in a similar manner, but those new units of exchange would be independent of MSC, and would exist alongside them on the Master protocol. One MSC is worth one MSC. 10 MSC is worth 10 MSC. One is worth one of whatever it is, and has an independent value, unrelated to the value of any MSC.

Quote from: FrictionlessCoin on December 30, 2013, 03:04:26 PM

We can continue to go on like this, and you begin to realize that is is all absurd.

Personally, I like the absurdity. Primarily, it provides a layer of abstraction that can be used for any number of purposes. It leverages the proof-of-work already occuring on an existing blockchain to lock-in additional transactions of the Master Protocol, which are interpreted separately from the Bitcoin transactions (using those Bitcoin transactions merely as transport for the additional data encoded in the Master Protocols cleartext transaction).

Quote from: FrictionlessCoin on December 30, 2013, 03:04:26 PM

It is absurd since Bitcoin is the gold and Mastercoin is just some label that you have printed on the gold. Sure, may have some value, but not anywhere near the Bitcoin.

To be honest, you make another good analogy. Mastercoin *can* be seen as the label youve printed on the gold. So, lets go with it. Youve got an ounce of gold. Its worth $1,200. On that block of gold is printed a Bitcoin address, and an encoded private key, which exists no where else. That key holds 10,000 BTC. How much is your ounce of gold worth? Now, on another ounce of gold is the entire source code of Adobe Photoshop. How much is that ounce of gold worth?