Humint to Use Mastercoin Protocol for “Goxcoin”

Humint, a company that helps “brands create digital currencies”, has announced its intention to create a “Goxcoin“. The Goxcoin is

Humint, a company that helps “brands create digital currencies”, has announced its intention to create a “Goxcoin“. The Goxcoin is intended to be issued to previous holders of bitcoins on MtGox. The hope is that the search and rescue gets under way for the 750,000 bitcoins on MtGox and eventually bears fruit.

The value of Goxcoin is tied to the number of MtGox bitcoins recovered: “dividends” are paid out in proportion to the amount of bitcoins recovered, and a “proof-of-burn redemption process” esnues if the recovery operation ever winds down. Any distribution is net of a “finder’s fee”. Goxcoins can be traded against bitcoins over the Mastercoin protocol.

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The coins, or “digital tokens”, are to be issued in a one-time shot to proven holders losing bitcoins at MtGox.

It does not appear that there’s a solution planned for losers of fiat on the exchange.

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Needless to say, Humint would first need to get MtGox on board in supplying the necessary data. This is unlikely to happen for any number of reasons. Also, even in the highly unlikely event bitcoins are recovered, there is still the hurdle of who gets first rights based on the bankruptcy proceedings and the outcome of any lawsuits, which may give preference to the plaintiffs involved. Indeed, it is hard to imagine where the scheme fits in, as it assumes MtGox hands over total control of all recovered bitcoins to Goxcoin. The simpler alternative (we’re assuming a best case scenario) is for MtGox to distribute bitcoins evenly to users on its own.

DC Magnates spoke to Ron Gross, Executive Director of Mastercoin Foundation, for his outlook on the initiative. He echoed the preference of waiting to first see how the lawsuits proceed before going full steam ahead. But the Mastercoin protocol is the way to go for initiatives like these, as “it allows holders to exchange GoxCoins with Bitcoins without a central party holding/managing the trades,” a lesson we’ve learned all too well from the MtGox debacle.

In terms of timing, Gross commented: “Our Distributed Exchange is going to be ready in 6 days, and Smart Property is up next – and this is an excellent use case for it.”

The concept follows a similar theme to what BitcoinBuilder started when MtGox was still alive, whereby GOXBTC can be traded for real BTC. With MtGox’s implosion, the site now says that all GOXBTC has been halted.

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