MasterNodes Review: How are Masternodes Useful for Cryptocoin Investors?
The emergence of Cryptocurrencies has left in its wake multiple innovations of financial technology and opportunities. One such innovative feature that is gaining popularity in is the Masternodes (MN).
What is a Masternode?
It is basically a cryptocurrency comprehensive node or computer wallet that holds the full copy of the blockchain in actual-time, quite like the Bitcoin full nodes that are constantly up & running.
Its main functions vary in various cryptocurrencies but it includes instant transactions and privacy, governance and voting, treasury and budgeting among others.
Masternodes are one of the exceptional structures that offer financial opportunities as one of the numerous avenues in Cryptosphere. It has handsome financial returns like trading and speculation.
How Masternode Works?
A Masternode can be operated either from a local computer or from a cloud-hosted server. Nodes are obliged to be up and running 24 hours per day to process all transactions.
Hence Masternode holders typically operate specially designed computer systems that work non-stop, or they adopt the use of cloud computing and virtual servers to run these nodes.
Aside from that, a dedicated IP address is required with some storage space on the computer to save the blockchain. Each Cryptocurrency with a Masternode peculiarity has a minimum number of coins required to operate.
This automatically creates a borderline for the category of investors or Masternode holders for any given blockchain.
In return for this computing work, Masternode holders get a reward, distributed proportionately among all. The premia can be daily, weekly or monthly at a percentage that depends on the particular Cryptocurrency and its rules of governance.
Impressively, holders can always get their initial deposit back or spend it if they are not interested in hosting again.
However, this would signify the end of their contract and they become disqualified for any entitlements or incentives that the contracts afford them.
Out of the almost 1600 cryptocurrencies listed on CoinMarketCap, there are more than 80 MN Cryptos in the burgeoning Virtual Currency market today.
This article takes a comparative analysis of the top four MN Cryptos.
Which Cryptocurrencies Rely on Masternodes?
Dash was the first Cryptocurrency to actually pioneer the Masternode concept.
Dash Masternodes power the network’s Instant and Private Send, Decentralized Governance and Dash Evolution. More importantly, it is Masternode holders that have voting rights and one Masternode qualifies as one vote.
The minimum requirement to hold Dash Masternode is 1000 Dash. Operators get paid 45% of the block reward on each block which is 1.3503 Dash per masternode every week.
Currently, there are 4,760 active Masternodes in the system bringing the total number of Dash in Masternodes to 4,760,000. This shows that 59.06 percent of Dash’s entire circulating supply is locked in Masternodes.
The PIVX network employs Masternode for coin mixing with an enhanced anonymization and instant transactions.
It also enables Decentralized Governance that renders a decentralized budgeting system which offers an immutable proposal and voting structures.
One needs 10,000 PIVX to run a Masternode. At the moment PIVX has 34.59 percent of Masternodes in circulating supply. This makes the current enabled Masternodes 2021 or 19,420,000 PIVX.
On a daily basis, each Masternode holder receives 1.8693 PIVX. Approximately, holders earn 682.2945 PIVX per annum.
Known as Znode, 1000 XZC is needed to be able to set up Zcoin Masternode. The return is 30% of the block reward which is 32.784 XZC in a month.
Znode aids in verifying the validity of transactions. According to the Zcoin team, in the future, they intend to use Znode to build block for additional services which include the delegation of Zerocoin transaction processing.
There are 1,853 activated Masternodes, which means 1,853,000 XZC,000 XZC are locked in Znode. Looking at the current Zcoin circulating supply of 4,702,138, it suggests 39.41 percent is in Masternodes.
Smartcash Masternodes are called Smart nodes and there are 11,489 that is currently in enabled mode. Therefore, 12.21 percent of its circulating supply which represents 114,890,000 SMART are locked.
The minimum collateral requirement to own a Smartnode is 10,000 SMART, exactly like PIVX but you don’t require Masternodes to vote on decisions and proposals.
Smartnode holders receive 10% of the block reward on every block, which is 7936.0125 SMART per annum.
At the time of writing this piece, Smartcash Masternode role on its blockchain is powering instant pay. The Networks Lead Dev, Proteus, claims that they plan to build SmartRewards into superblocks which will be powered by smartnodes/sporks in the near future.
What is the Future of Masternodes?
Considering the incentives and the financial opportunities Masternodes present, it won’t be a surprise if more cryptos go that way. However, is the ecosystem going to embrace this phenomenon?
It seems many people in this space are yet to discover this unique financial freedom as part of the many innovations Blockchain technologies provide.
It is a matter of people discovering it, then it will become a prominent part of the Cryptocurrency ecosystem.
Other Investment Vehicles
Investing in Masternodes remains a major alternative investment route for many in the crypto ecosystem.
However, trading in already established cryptocurrencies stands as one of the most popular vehicles adopted by many.
Being that a lot of traders do so on a part time basis, the employment of crypto trading bot is seeing some significant growth.
Trading bots are simply computer algorithms that are attached to trading accounts on crypto exchanges.
They act as representative trading programs that execute orders on behalf of the account holders.
Besides automated trading, participants continuously seek effective ways to maximize the opportunities presented by the crypto market.
Community trading and signal services are also becoming more popular within the ecosystem. Platforms such as Blockchain Whispers represent one of the most effective channels where traders can access trading signals.
Then there is cryptocurrency mining. Even though the rewards earned by Masternode holders are also regarded as mining, there exist a different kind of mining that is more generic to the industry.
A typical example of this is Bitcoin mining which is actually the primary process by which new coins are generated in the Bitcoin blockchain.
Bitcoin mining is carried out by computer processes that validate transactions on the Bitcoin blockchain.
As a reward for the validation, the processing computers earn Bitcoins in return for the work involved in the validation process.
MasterNodes Bitcoin mining can also be described as the major process of maintaining the Bitcoin blockchain as a whole.
While Bitcoin and other cryptocurrencies try to make their way into the mainstream, exchanges, for now, serve as the most ideal gateways between cryptos and fiat.
Apart from mining, the most popular medium through which users access Bitcoin and altcoins is through the exchanges.
The popularity of exchanges has been on the rise primarily due to the increasing transaction demands between cryptos and fiat.
This has led to an influx of new participants in terms of exchanges into the marketplace. Just like any other emerging market, there must exist the good, the bad and the ugly.
While some bad eggs may set out primarily to rip-off ignorant investors, others with honest intentions but inadequate capacity can run into trouble.
This can be the determinant move for success or failure when investing in cryptocurrencies.
Whether by holding Masternodes, mining, buying from exchanges of receiving as payment for product or services, the number of participants in crypto is fast growing. So to the capitalization of the crypto market.
As at the time of writing, the total capitalization of the entire cryptocurrency market is over $280 Billion.
Considering its current stage in terms of development, and the influx of new participants, this number is expected to grow even more in the near future.
Stay tuned to Coin Review because we are preparing a list of profitable masternode coins which we will be sharing soon.
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DisclaimerThe writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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