user78: Mastercoin is based on Bitcoin, and has a very similar security model. However various parameters make the security different (some better, some maybe worse).
How exactly do they differ, security wise?

user10138: Mastercoin Founder here.
Mastercoin inherits its security model from bitcoin, with some minor changes. To undo a Mastercoin transaction, you'd have to undo the bitcoin transactions containing the Mastercoin transaction data, so we have almost as much security as bitcoin itself. I say "almost" because the order of Mastercoin transactions in a bitcoin block matters, and a block-chain reorg can affect that ordering, because bitcoin miners don't pre-validate mastercoin transactions before including them in a block (bitcoin transactions must be valid before they will be included by a miner). Consequently, in the event of a blockchain reordering event, a Mastercoin transaction which was previously invalid can become valid due to reordering.
The end result is that a Mastercoin transaction with 3 confirmations is less secure than a bitcoin transaction with 3 confirmations, but more secure than a bitcoin transaction with 2 confirmations. I typically say that Mastercoin transactions are "half a confirmation less secure" than bitcoin transactions against double-spend attacks.
In the future, Mastercoin will be MORE secure than bitcoin - specifically against theft and loss. Mastercoin features include the ability to put restrictions on a "savings" address such as temporary reversibility and spending limits. These limits directly prevent theft, and indirectly prevent loss (since it is safer to have more backups of a wallet which can't be stolen).

78: <p>Mastercoin is based on Bitcoin, and has a very similar security model. However various parameters make the security different (some better, some maybe worse).</p>

<p>How exactly do they differ, security wise?</p>
 10138: <p>Mastercoin Founder here.</p>

<p>Mastercoin inherits its security model from bitcoin, with some minor changes. To undo a Mastercoin transaction, you'd have to undo the bitcoin transactions containing the Mastercoin transaction data, so we have almost as much security as bitcoin itself. I say "almost" because the order of Mastercoin transactions in a bitcoin block matters, and a block-chain reorg can affect that ordering, because bitcoin miners don't pre-validate mastercoin transactions before including them in a block (bitcoin transactions must be valid before they will be included by a miner). Consequently, in the event of a blockchain reordering event, a Mastercoin transaction which was previously invalid can become valid due to reordering.</p>

<p>The end result is that a Mastercoin transaction with 3 confirmations is less secure than a bitcoin transaction with 3 confirmations, but more secure than a bitcoin transaction with 2 confirmations. I typically say that Mastercoin transactions are "half a confirmation less secure" than bitcoin transactions against double-spend attacks.</p>

<p>In the future, Mastercoin will be MORE secure than bitcoin - specifically against theft and loss. Mastercoin features include the ability to put restrictions on a "savings" address such as temporary reversibility and spending limits. These limits directly prevent theft, and indirectly prevent loss (since it is safer to have more backups of a wallet which can't be stolen).</p>
