With every passing day, there’s a new opportunity emerging in the world of Cryptocurrencies. And with new opportunities, comes new ways and possibilities of making handsome amount of money. More and more people are flocking towards the crypto market to try their luck through one or more ways of earning and getting hefty rewards.
One such way is by running a Masternode. It’s vitally important to understand the Masternode before indulging in the earning process.
What is a Masternode(MN)?
Masternode, in simpler terms, is a series of servers that support the blockchain network. Masternodes work much like proof of stake, where there is a staking of a certain amount of a given currency within that blockchain network which in turn fetches some income for the owner who made the stake.
Technically, Masternode is a cryptocurrency full node which can also be considered as a computer wallet that stores the complete copy of the active blockchain in real time.
Dash was the first coin to originally develop the masternode to implement services like InstaSend, PrivateSend, and Decentralized Governance. Such nodes function differently as compared to normal nodes. Masternodes possesses unique features and functions apart from just storing the copy of blockchain and relaying transactions.
Some of the unique functions of Masternodes include:
- Increased Security
- More private transactions
- Instant coin transactions
- Participate in decentralized voting
How could Masternodes(MN) grab you a good passive income?
As I mentioned before, Running a Masternode will fetch you rewards/coins in return which involves staking your part of the given currency. So, why do you think you’re getting the reward?
The answer is because you help secure the network by validating the transactions instantly by the proof-of-stake mechanism which in return gets you rewards.
The amount of stake is already specified by the cryptocurrency project and also the minimum and maximum period for the stake along with the reward scheme.
The rewarding system varies from one cryptocurrency to another through which the masternode operator can make a considerable weekly or monthly earning which can also be termed as a passive income.
Not all cryptocurrencies in the market allow running a masternode. For a complete list of masternodes, you may follow masternodes.pro
Thinking of running a masternode? Consider asking yourself some questions!
- Are you well-versed in the knowledge of Cryptocurrency market? and how does it work?
- Have you fully understood the concept of masternodes?
- What is your level of technical expertise in setting up and running a masternode?
- Is the masternode coin that you’re targeting, valuable enough in terms of ROI? and Is it listed on the top and commonly-heard exchanges?
- Have you gone through the whitepaper of the project to understand the coin’s purpose, the team behind the project and the future updates of the coin?
- What are the minimum requirements of that masternode coin for setting up its masternode? – the stake amount, time period, reward percentage, etc
- Did you compare this project with other similar successful projects (for eg. Dash, pivx, etc.) for its deal offerings and ROI?
- Have you visited the public forums like thebitcointalk.org and many others to find out the reviews of public and other investors and also if the team of the project is active enough to respond and post the updates regularly?
- Is the coin regulatory viable? Will it be able to sustain itself against the regulatory challenges?
- Are you investing in masternodes just because of FOMO? Even if not, take good time to think over the decision.
The answers to the above questions must and must be positive to go ahead with your masternode-running decision.
Lastly, for setting up and running the masternode, carefully go through the process depicted on the respective masternode’s site or contact their customer care department(if they have one), in case you find any trouble in the setup.
Having done this, still always bear in mind the worse side. Any investment comes with the risk of losing, especially when the legal background is ambiguous. Many times, the cost of running the masternode exceeds the rewards earned due to fluctuating coin prices.
Always double-research on the cryptocurrency that allows running masternodes as there have been plenty of masternode scams and you might not want to lose your stake by just looking at the handsome luring reward schemes that the currency offers. Choose the right cryptocurrency by smartly calculating the profits based on your stake amount.
Once you have chosen the right cryptocurrency and have got your masternode running, enjoy your rewards and also do let us know about your investments and your experience with running a Masternode in the comment section below.
Note: I don’t own any masternodes currently but based on my research, I tried to cover most of the questions that may affect your stake amount. Hope, it adds value to the Masternode Beginners. Also, if you have any more questions or suggestions, feel free to add in the comments below and I’ll surely update the list.