We have discovered that a lot of cryptocurrency enthusiast and investors have very little or no knowledge of what a masternode is. There have been recurring inquiries in crypto groups and forums seeking to know how masternodes are different from other ways of earning from cryptocurrency and how a cryptocurrency investor can profit from running masternodes.
In a recent conversation with a friend of mine, Terry who has in the past three years enjoyed dividends of trading crypto, it hit him like a shocker that one could be rewarded (more like earning interests) for holding a token – as it is with masternodes.
In this publication, efforts are made to explain masternode cryptocurrency in its basic way possible. We will touch the possible benefits of running masternodes and how to get started.
You’ve been waiting for this, now let’s get down to business.
What Are Masternodes?
A Masternode is a server that hosts the full blockchain ledger of a specific cryptocurrency on a decentralized network. These servers are computers connected online 24/7 to process transactions which allow blockchain to function.
There are three types of Blockchain which include: Proof of Work (POW), Proof of stake (POS), and a combination of both POW/POS. And each of these blockchains has the mechanism to process transactions. Masternode is not exclusive to the Proof of Stake (POS) blockchain as speculated by some persons but often preferred. However, some cryptocurrency projects based on the Proof of Work (POW) blockchain consensus also utilizes the masternode system.
Masternodes exist to maintain the network and thus a commitment is required of an operator to lock away a portion of coin as collateral (which varies depending on the coin) through a process called “Masternode Setup”, that help to validate and store transactions and enable you to earn extra coins from a portion of each block reward generated within the network.
Block Rewards are paid out at different intervals following a consensus-based protocol to all Masternode holders operating or participating within the network. Be reminded that it is your agreement to “look-away” or set up the required amount of coin (collateral) that grants you the right to participate in validating transactions in the blockchain and get the reward in the process.
How To Make Money With Masternode Cryptocurrency
It takes the understanding of the concept of masternodes and how to host and run your masternodes that making relatively stable and regular passive income becomes reality. This is different from the regular approach of merely holding a coin itself, analyzing market trends and hoping for the price to increase.
1) Research A Masternode Coin To Invest In
First, think of a coin you’re willing to invest in, identify it and take all diligence to do your research about it. Do not give yourself any excuse to invest in a masternode you have little to no understanding of the underlying asset.
Almost every single coin has readily accessible whitepapers online. Join the coin community (Telegram, Discord or follow their twitter handle) and get in touch with the team if possible.
Coin Mega Trend platform currency – CMTR is an example of a masternode coin. It is currently trading on Crex24 Exchange. https://crex24.com/exchange/CMTR-BTC
Detail website: https://cmtrcoin.info/
And stats: https://masternodes.online/currencies/CMTR/
Masternodes online website is a great tool to keep an eye on when considering masternode investment. https://masternodes.online/ is a comparison tool that features current statistics and market performance of coin listed there. The site shows Daily/Monthly/Yearly Income estimate,
Return of Investment estimate, Coins supply, Informational Graphs, and all available links to the project’s community.
ROI information displayed on the website often change and thus you should not base your entire buying decision on that.
CRITERIA FOR CHOOSING A MASTERNODE COIN TO INVESTMENT IN
What you should consider as criteria for choosing a masternode coin to invest in should include.
1. Project potential
2. Involvement of the development team
3. Stability of the coin,
4. Required investment and
5. The estimated ROI
2) Purchase The Required Coin Collateral For Masternode
Each coin project has its specified amount fixed as collateral required for masternode. CMTR Coin requires 5000 CMTR as masternode collateral, 1000 required coins for DASH masternode, some other projects may require 10,000 or 3,000 coins to be locked up as collateral.
This, you have to purchase for yourself the required amount of coin collateral for masternode. Either from exchange or during coin presale. As the collateral varies, so is the amount needed to purchase the amount of coin depending on coin value.
3) Download And Install The Coin Wallet
It is a bit of common cryptocurrency advice never to leave you tokens/coin on an exchange longer than necessary. You need a computer or a laptop wherewith you have the coin wallet installed and encrypted for security.
Web wallets are not compatible with running masternodes. You need a device capable of running cryptographic hashing functions (mostly a computer or a laptop) windows, Linux or Mac.
Move your coins from the exchange into your wallet. You are ready to set up your masternode.
4) Setup Your Masternode
HOW TO SETUP YOUR FIRST MASTERNODE
The process of setting up a masternode is not rocket science. It is straightforward. The secret is; most masternodes are built on the same codebase. Meaning that the deployment (Setup) process is very similar for most masternode coins.
To start, you’ll require either a dedicated PC that is internet-connected and online 24/7 to support the masternode network. A remote Windows or Linux server (VPS) like Vultr is usually helpful.
Vultr (VPS) is a global cloud server platform for hosting other servers. First signup here with my ref. link: https://www.vultr.com/?ref=8217973 You will only be charged when you deploy a server. This will require you to select a payment option. About $5/month.
Ask for Masternode setup guide from the coin community or utilize any available ones on the web. Follow the script one step after the other. Once you have successfully deployed your masternode, you’re set to start earning rewards.
5) Sell Your Masternode Reward on Exchange.
Here are the reasons why we all want to invest in masternodes – the regular reward payout and passive income even while you are asleep.
Although the reward earning rate depends on many different factors, including the number of masternodes in the network. Some network distribute reward earned once daily, while others payout multiple times a day, into your wallet.
In your wallet are instant or private transaction features, send and receive features, etc where you can easily withdraw your rewards to an exchange for trading for BTC or fiat.
Should I Sell My Masternode Reward Daily or Weekly?
This is optional and the choice is personal. You can choose to sell your masternode reward daily, weekly, or monthly. Below are a few things to consider.
– Possible Prediction.
Regardless of the purchase value per coin, you would be excited if you get favored to make much more profit. Thus, if you predict the coin will hit higher price $$ in a week or months, you would keep your coin rewards until the price goes up.
If you usually sell daily, not a good idea to sell right off if you are expecting a price pump. You were lucky to get them at lower prices, it actually would be really sad for you to sell them for a ridiculous price regardless.
– Unfavorable market price
Your coin holding value is largely dependent on the market situation. Not for routine sake should you sell rewards daily for worthless price.
In Masternode cryptocurrency, you lose nothing when you don’t sell low but don’t forget to take profit.
You can accumulate your rewards to amount needed to raise a second, third, fourth and more nodes. This is dependent on your choice. You may also want to sell to diversify your holdings.
Masternodes are a good investment option for making passive income in cryptocurrency. It might be the right time for you to start holding up some masternode digital assets. A few good holdings can keep generating rewards as long as possible.
It is still the early days of masternodes coin. And you’re part of the early adopters, don’t miss out!