What do Masternodes Mean to Investors?

Operating Masternodes is the newest gig in blockchain industry, grabbing attention by enabling investors earn passive incomes from carrying out simple mathematical processes. But what are they and how can you find masternodes?

Masternodes, in simple terms, are series of servers on the blockchain that are used to conduct specific tasks that miners are not enabled to handle. These tasks are executing DirectSend /InstaSend as well as processing private transactions. To be able to process the mentioned services, masternodes servers use specific algorithms by holding a minimum of given amounts of currency in special staking wallets. This model works in a similar manner as Proof of Stake concept. So similar in fact, some people often think Masternodes work strictly under PoS. This is not true. PoW Projects including Bitcoin run Masternodes. 

To operate a Masternode, one is required to set up a server. There are several servers available in the market, obtaining these services costs about $10 a month. With the server in place, setting up a Masternode is pretty much easy with basic tech skills. Should it present a challenge, there are a number of hosting companies that do it at a fee. Once a Masternode is set up and assets staked in special wallets that serve this function, investors take a back seat and watch their investments grow. All cryptocurrency Networks that use Masternodes have protocols that set out the minimum amount of assets required to run them. Case in point, Dash crypto requires one to have a minimum of 1,000 Dash coins, which can also be held in a dedicated Dash Wallet.   

Given that Masternodes run computations over and above that which other nodes don’t, and that huge sums of funds have invested them, operators are compensated for the work done. Compensations are usually in form of incentives through Block rewards. They are paid out using the Networks’ native tokens. Investors can sell tokens in exchanges, use them to increase stake in holding wallets for higher returns or hold them waiting for price rise. Commonly, token prices go up with time as they reduce and demand with demand going up. This is because Networks generally use the tokens in form of utility to power operations within the Blockchain. Depending on the coin invested in, investors get paid once or several times a day. Other than Dash, virtual currencies that run Masternodes include; Monetary Unit (MUE), ION (ION), Neutron (NTRN), PIVX (PIVX), ChanCoin (CHC), Crown (CRW), Bata (BTA) among others.  A comprehensive list showing cryptocurrencies and return percentages in rewards is found in findmasternodes.io 

Other Earnings Through Masternodes

Networks have protocols for sharing incentives within the chain. Usually, Masternode operators and miners equally share 45% of Block rewards.  10% goes to the treasury funds where operators get to vote on their allocations. Sometimes, they vote to allocate portions into investments. Returns on the investments are in turn shared amongst themselves. These perks are enjoyed while the staked amounts increase as prices rise. While the initial intention is always to gain profits through expected improvement in market prices for the coins, Masternodes come in as effortless side hustles.  

It is important to note that being a Masternode operator is not just about making more money. It is an investment that requires commitment to the future and improvement of the Network. Although voting and governance are also simple tasks that do not require much time, it is a significant task that calls for genuine interest in the well-being of the Blockchain. 

Masternode servers help streamline service delivery as operators have an obligation of maintaining the servers properly to ensure everything runs smoothly. This in part includes ensuring that the system runs 24/7. While it is in the best interest for an investor to be open throughout to assure higher returns, it is significantly important for running of the system. So we can say, being part of a the team that grows a Network and seeing how significantly seemingly small acts impacts the Blockchain revolution, should be a reward in itself. Over time, as general cryptocurrency marketing improves, the rewards and networks should continue to grow and make Masternodes even more attractive investment vehicles.

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