From a technology perspective, Ethereum is light-years ahead of Mastercoin. I spent countless hours warning people about Mastercoin back before and during the crowd sale.
At this point Ethereum doesn't need to deliver on smart contracts, it is simply a better Bitcoin. It has enough market cap, liquidity, and hype that it will continue for years. I highly doubt that Ethereum will ever fall below Litecoin or Ripple.
Thanks for the comment!
Fair enough analysis that Ethereum is ahead of Mastercoin. I don't think that's saying that much, though. A monkey randomly typing on a keyboard would be only 5% worse than what Mastercoin came up with.
There were so many vulnerabilities in Mastercoin that nothing actually was made on it. Ethereum has at least gone above that threshold, but then look what's happened. There's a clear vulnerability in how you make smart contracts in Ethereum and it's led to this huge DAO theft. The complexity of Ethereum's system is at least an order of magnitude more than that of bitcoin and I would argue that's going to lead to many more vulnerabilities in the future.
Once smart contracts are found to be horrendously expensive to secure, I think it will start a fall that won't be stopped. Interest will wane until the next project.
-deleted-
This may or may not be true. I have some reason to doubt, though. Remember that the complexity of ethereum is very high and that any security hole potentially costs people lots of money. I believe there will be far more exploits than this one and that as smart contracts have more risk associated with them, there will be more of a demand for auditing the code. Auditing code, especially in the javascript-like environment that ethereum has is not simple and to get any guarantees is going to be very hard. It would be one thing if this were OCaml or something similar that can provide some proofs, this is not that.
Hence, the costs to audit and provide guarantees on even a small contact are going to be very expensive. Think like 100-200 hours of expensive developer auditing time per 10 hours of developer coding time. It's much easier to code than to audit and the set of developers that can code something is much larger than the set of developers that can audit it.
In other words, this is going to be a very expensive thing to do. Perhaps there will be a market for smart contract auditing services and the like which can streamline this stuff, but for now, that doesn't exist. I still think this is going to be a much rougher road than perhaps you and dantheman seem to think for ethereum.
-deleted-
Sorry, I think I misunderstood. I thought you were saying that smart contracts wouldn't be expensive to secure.
My mistake. I was the one who was confused about your comment, which I completely agree with. I deleted my confused comments.