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.
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.
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.
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 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 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.
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.
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.
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.