1. What is Masternode?

Masternodes, referred as “MN”, are computers that run a Masternode coin wallet and make decisions, such as locking transactions with InstantSend, coordinate mixing of coins, and voting on budget funding. Dash was the first cryptocurrency to implement the masternode model into its protocol.

Blockchains, in broad terms, break down into two types. POW (proof of work) and POS (proof of stake).

POW blockchains, such as Bitcoin, are underpinned by ‘miners’ who process transactions by ‘mining’ blocks which are then added to the blockchain. POS is proof of staking, which is familiar to stocks, the more stock you have, the more rewards you get. POS nodes sit on the blockchain, normally within a queuing system, and when they reach a certain position in this queue can be selected, at random, to be rewarded for participating within the network. As a result of this rewards can appear at different intervals but usually average out over time.

Both POS and POW can be viewed as a first tier network of miners to achieve distributed consensus on the blockchain. The secondary layer using Masternodes allows for Private Send, Instant Send, DAO and the rights to vote on decisions regarding the upkeep and improvement of the blockchain you are on. The use of Masternodes is often referred to as “Proof of Service” due to the service it provides to an existing protocol with its added functionalities. (Example: DASH calls its use of Masternodes protocol Proof of Service) .

Thus, Masternode should get rewards as the return of service.

2. How Much Money Can Masternodes Earn?

In getting into the nitty gritty, masternode operators typically win anywhere between four percent and 785 percent of a given block reward, depending on which cryptocurrency is being supported. A masternode is sort of like next-level holding. For example, with current masternode numbers and rewards masternodes earn approximately a 7% return on Dash, 132% on LGS, which is much higher than traditional ROI.

Depending on which company you go to and what package you choose, your server hosting costs should be somewhere into the dozens of dollars. However, these rewards help offset the costs of running masternodes in the first place, while also inspiring the creation of further masternodes. You have to “hold” a large amount, but in doing so according to the specialized process, you’ll earn constant block reward payouts, especially in the bear market situation.

3. What is risk?

Masternodes are parts of cryptocurrency projects. Crypto in and of itself is extremely risky. Many an investor has lost more than 100% of their investment more than once playing with this kind of fire. The losses amount to not only the initial capital but also the time and energy used to find and operate the node.

The necessary way to invest in nodes is by doing your research and scoring each project according to a set of criteria, such as cost, develop team, project analysis, annual ROI, market predict, etc. This make a reliable third-party server provider important. As a professional Masternode service expert, Nodeasy can offer you accurate information and helpful community.

4. How to host a Masternode?

Setting up a masternode is technically complex for the untrained user.

A masternode needs:

A. A dedicated server and dedicated IP address constantly monitoring for software updates with 24/7 uptime.

When choosing a hosting company for Masternodes, avoid regular hosting companies which are aimed at regular websites, a VPS server can give you full control over it and allows you to install any software you like.

B. Large amounts of collateral in the form of its native coin.

Committing a sizeable amount of collateral ensures that masternode operators have a significant stake in the project and thus, reduce the likelihood of them having malicious intent.

C. Necessary tech knowledge.

If you want to run your own masternode, you’ll need to start getting some familiarity with Linux command line.

5. Nodeasy.com - Your Masternode Service Expert

1. Information Updating.

Nodeasy.com update MN projects information including price, volume, website address, ROI, official news, etc., to help investor save time and energy on information collection.

2. Project assessment.

Nodeasy.com, as a professional MN project analyst, provides rating for all MN projects. Find the best fit project from high rating MN projects.

3. One-step Masternode service.

Nodeasy.com provide Masternode hosting service, to help remove barriers to owning a Masternode.

4. Masternode Community.

Nodeasy.com operates Masternode followers community.