Quote from: skrth on March 21, 2014, 09:52:13 AM

Quote from: https://bitcointalk.org/index.php?topic=292628.msg5795861#msg5795861

Quote

If the specification is accurate it also follows that, because there is no implementation that recognizes Class B transactions with P2SH outputs to uncompressed public keys as invalid, no implementation can be trusted to display the correct mastercoin balance of an address.

Further, a significant sum of bitcoin has been unknowingly traded with parties which may not even know how much mastercoin they have. Given the possibility that this party has a mastercoin balance to cover the trade, there's no guarantee that it was actually sent to the buyer.

It's really tragic for mastercoin if the spec is accurate, because the loss of bitcoin in invalid mastercoin transactions cannot be recovered, and every single wallet/implementation is useless as a method of sending, receiving, trading, or otherwise interacting with the mastercoin network.

What does this mean? Is there now a possibility mastercoins bought from exchanges / users are not valid?

Mastercoin balances can be trusted. Our friend appears to have some complaints that some of our bitcoin outputs are (temporarily) unspendable, but I haven't seen any evidence of a way to get a Master Protocol client to display an incorrect balance.