What are masternodes?

Before you become part of our club, you should really know what a masternode is and what it is needed for. On this page we will introduce you to masternodes, the concept of staking and some masternode crypto currencies. The best way to get an independent opinion is to do your own research. On Masternodes.online there is an overview of the most popular masternode coins and further information.

Introduction - consensus through participation

Let us start with a simple example. There are 100 people in a room. Every 10 seconds, information is provided from a loudspeaker. Each of the participants takes notes on a sheet of paper. After 10 minutes, a decision must be made as to whose notes are correct and should apply for everyone.

Proof of Work

With the Bitcoin network the following is simply done in the so-called Proof of Work procedure: All participants in the room now receive an arithmetic problem. The version of whoever solves it first is again checked and accepted by all. As a reward, the participant (miner) gets a so-called Block-Reward.

Proof of Stake

The process is a bit different in the case of staking. Here one looks at how many crypto currencies each participant in the room already has. The one with the most coins is allowed to submit his version most often (proportionally) and receives the reward. Why? Because, from a purely logical point of view, he has the least interest in manipulating the system.

Nodes

These are the two best-known and most important procedures for creating a consensus in a decentralized blockchain network. These networks copy their ‘cash books’ decentrally into so-called nodes all over the world. A miner or staker always operates a so-called Full Node (complete copy of the blockchain). This is necessary to check the correctness of transactions.

Masternodes and their tasks

Masternodes are also copies of the blockchain. Masternodes are also always Full Nodes. Some crypto currencies have this additional service built in to secure and extend their service. There are roughly 500 masternode-capable crypto currencies.

A masternode offers different functions to its network. With some crypto currencies, these have a higher weighting when voting on updates. Many crypto currencies use the masternodes services to make transactions anonymous. Masternodes also enable faster peer-to-peer transactions.

Higher block rewards

An important aspect of the masternode is the minimum quantity a node has to fulfil. For a Bitcoin Green Masternode, for example, 2500 coins are required. If a masternode does not meet the minimum quantity, it is no longer considered a masternode and loses its privileges.

Thanks to this minimum quantity, there is always a certain number of coins bound to the network. At the beginning of a crypto currency’s new masternode network there are thus often very few masternodes. The quite high block rewards are now distributed among the first few owners of these masternodes. High returns are therefore possible here at the very beginning.

Analysis is everything

So why doesn’t everyone get rich with masternodes? This question can be answered by offering a comparison to the stock market. Just as every share does not only rise, the prices for various coins also do not always rise. The same question arises as with a share: Is the business model or the application area of the coin or the crypto currency promising or not?

A 1000% ROI through Block Rewards is only interesting if the coin is not worthless. Even 100% doesn’t do you much good if the coin is only worth 1% of its original value within a few weeks.

At GetNode, we analyse the coins very carefully and prefer to stick to sustainable and proven masternodes. With a small part of our portfolio we nevertheless experimentally cover new masternode coins for a certain time. However, these are closely monitored regarding ROI (Return on Investment) and are directly dissolved and sold at the slightest sign of a severe price loss.

The reasons for a Masternode Pool

Anyone with suitable PC skills can install their own masternodes. There are countless instructions on YouTube that take you through the setup process step by step. So why did we nevertheless decide on a Masternode Pool?

The advantages of a pool are obvious. Some masternodes cost several thousand euros. The more diversified you want to set up your masternode portfolio, the higher the capital needed by the individual. The higher the personally required capital, the higher the share of risk in the crypto market.

A Masternode Pool offers a maximum diversification (distribution) of the risk on different masternode coins even for extremely small amounts of money. The larger a pool, the higher the proportion of expensive and stable masternodes.

FAQ - Questions and answers on masternodes

The criteria for a good masternode coin from our point of view are the following:
– On the market for more than 3 years
– Stable prise despite volatile market phases
– Active Discord community
– Quick support by the developers
– A real project behind the coin
– Updated website and social media channels
– Realistic block rewards

You can become a member in our pool starting at 1000 euro or 1200 USD or 0,2 BTC. Of course, you can always top up the share. Many of our members would like to test the service first and wait for the first payout. We completely understand that.

As you already know, the yields of the masternodes are always in the corresponding coin. So that our members do not have to set up respective wallets for all coins, we regularly sell the proceeds for bitcoin. Bitcoin still has the highest acceptance rate and is the easiest to exchange for dollars, euros or other crypto currencies at most trading places.

Proof of work involves high acquisition costs in the hardware area. The hardware requires special conditions regarding electricity prices, cooling and personnel. A lot of work and effort is required to scale these framework conditions in a globally operating and decentralised network in such a way that a serious threat to the network arises. Proof of Stake only requires money and an arbitrary infrastructure of servers. Of course, this only applies to smaller coins, the larger a network the more difficult it becomes.

Yes, this has even happened many times in the past. That is why active management and monitoring are so important. We therefore also stick to masternode coins which have been on the market for several years. Naturally there are already a lot of masternodes online and the yields are not quite as high anymore. For us, security and sustainability come before maximum profit through taking risks.

No, as a member of GetNode you don’t have to install your own masternode. We take care of the complete technical service and support for our members. Our members also have no influence on the selection of the masternode coins that we set up or dissolve.

Yes, the coins linked to the masternode coin become worth more as the price rises. The same applies to the block rewards which come in the form of coins. However, you must understand one thing, we sell the coins for Bitcoin. If the Bitcoin also becomes proportionally more valuable, the payouts to our members do not increase automatically.