What is Masternode and how is it useful for investors?
In the cryptosphere, there are several ways you can make profits outside of active trading. One of these ways is to run MasterNod, a server on a decentralized network. Simply put, a MasterNode is a node (server) or cryptocurrency wallet that stores a full copy of the blockchain in real time. For many cryptocurrencies, MasterNodes are an essential part of the blockchain network.
The functions of MasterNodes differ between cryptocurrencies depending on the type of implementation and their functions in the network. In most cases, however, MasterNody serves to increase the privacy of transactions, mediate instant transactions, provide a platform for participation in voting and blockchain management, or serve as a reward system that rewards the establishments of these nodes for participating in networking. MasterNodes are not separate units, but always communicate with other nodes, creating a decentralized network. The first cryptocurrency to begin using the master model as part of the transaction confirmation mechanism was Darkcoin, known after rebranding as today's DASH.
MasterNodes (MN) operate on the basis of "staking" - holding a certain amount of cryptocurrency coins, which the operator guarantees. These coins must not move and are therefore out of circulation. Staking is a form of network integrity protection, as the MN operator is liable for a certain amount of cryptocurrency. Cryptocurrency mining is one way to obtain them. There are two different mining concepts, traditional energy-intensive Proof-of-Work (PoW), using computing power (CPU, graphics card, ASIC) and the increasingly popular Proof-of-Stake (PoS) based on coin holding. MasterNodes are an increasingly popular mechanism in blockchain networks and PoS mechanisms, to whom they provide a form of passive income.
MasterNode: Passive income
MasterNodes are popular among cryptoinvestors primarily from an economic point of view, because owners receive a reward for operating MN. Basically, you can think of it as valuing your savings. Different cryptocurrencies have different economic models by which an MN operator can earn a decent monthly or weekly income. If you happen to have invested in a cryptocurrency that allows you to run MN, you should consider this option.
There are many cryptocurrencies on the market that allow you to run a MasterNode, but not all of them are worth running. For a list of cryptocurrencies that offer the MN option, along with payback data, see masternodes.online. Rewards for operating and maintaining MN can bring significant revenue over time. However, due to the gradual increase in the number of nodes, the reward decreases over time.
One essential feature of MN that should be noted is that the cryptocommunity encourages and welcomes their creation. Partly because the community also benefits indirectly from MN. The coins that appear in the MN are not actively used and are therefore out of circulation. And as the economy teaches us, as demand rises, so does the price. And because there are fewer coins in circulation, the price rises all the more.
How to operate a Masternode?
First of all, it is necessary to have a virtual server (VPS) purchased, if you do not want to have a special computer running 24 hours a day just for cryptocurrencies. Such a server can be purchased for about $ 5 a month. It is also necessary to have in your wallet the exact number of coins needed to put the masternode into operation. Furthermore, it is necessary to install a wallet on the VPS, usually in Linux, and use Linux commands to run the entire masternode. Instructions are often on the pages of the coins, it is nicely processed, for example, the Calculus coin. But for a novice, it can still be difficult and confusing.
MasterNodes are great for those looking for passive income and have enough resources to meet the requirements. Some currencies supporting MasterNody can be expensive today, but when looking for new ICOs, you may be able to find a project that MN supports and is still "cheap". If the project is successful, you can benefit significantly from it. Staking coins to earn a reward and operate a node that confirms transactions, facilitates and supports the blockchain network, is one of the best systems to maintain decentralization.