Before you join our club, you should really know what exactly a masternode is and what it is needed for. On this page we introduce you to masternodes, the concept of staking and also some masternode-enabled crypto currencies. It is best if you additionally form an independent opinion by doing your own research. On Masternodes.online you will find an overview of the most popular masternode coins and further information.
Let us start with a simple example. There are 100 people in a room. A loudspeaker gives out information every 10 seconds. Each of the participants takes notes on their own piece of paper. After 10 minutes it must be decided whose notes are correct and valid for everyone.
In the Bitcoin network, the following is done through the so-called Proof of Work procedure: All participants in the room receive an arithmetical problem and whoever solves it first gets his solution verified and accepted by everyone. As a reward, the participant (miner) receives a so-called Block Reward.
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.
These are the two best known and most important procedures for reaching 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 (a full copy of the blockchain). This is necessary to check the correctness of transactions.
Masternodes are copies of the blockchain. Masternodes are also always Full Nodes. Some cryptocurrencies have built in this additional service to secure and extend their service. There are almost 500 masternode-enabled cryptocurrencies.
A masternode provides its network with different functions. With some cryptocurrencies, masternodes have a higher power when voting on updates. Many cryptocurrencies use the masternode services to make transactions anonymous. Master nodes also enable faster peer-to-peer transactions.
An important aspect of the masternode is the minimum quantity that a node must provide. For example, 2500 coins are required for a Bitcoin Green masternode. If a masternode does not meet the requirement about the minimum quantity, it is no longer considered a masternode and loses its privileges.
Due to this minimum quantity, a certain amount of coins are always bound in the network. Therefore, at the beginning of a new masternode network of a cryptocurrency, there are often very few masternodes. The rather high block rewards are now distributed among the few first owners of these masternodes. High returns are therefore possible, especially at the beginning.
So why doesn’t everyone get rich with masternodes? This question can be answered by making a comparison to the stock market. Just as every share does not always rise, the prices of various coins do not always rise either. The same question arises just as with the shares of companies – is the business model, the application area of the coin or the cryptocurrency promising or not?
1000% ROI through Block Rewards is only interesting if the coin is not worthless. Even 100% does not bring you much if the coin has only 1% of its original value within a few weeks after its appearance.
We at GetNode analyse the coins very carefully and prefer to stick to sustainable and reliable masternodes. With a small part of our portfolio, however, we cover new masternode coins for a certain time on an experimental basis. However, we keep a close eye on them in terms of ROI (Return on Investment) and dissolve and sell them immediately at the slightest sign of a severe price loss.
Anyone with adequate PC knowledge can install their own masternodes. There are countless instructions on the Internet that guide you step by step through the installation process. Why did we decide to launch a Masternode Pool though?
The advantage of a pool is obvious. Some masternodes cost several thousand euros. So the more diversified you want to make your masternode portfolio, the higher the capital requirements are. The higher your own need for capital is, the higher the risk share in the crypto market.
A masternode pool thus offers maximum diversification (distribution) of the risk on different masternode coins even for extremely small investments. The larger a pool, the higher the proportion of expensive and therefore stable masternodes.