Masternode: What is a Masternode?

Created for the first time in 2014 with the DASH cryptocurrency, the Masternode very quickly became a system for providing several services within the blockchain. If Bitcoin mining with the concept of Proof or Work is to secure the cryptocurrency network, it is not the only one. The Masternode also has the main role of carrying out, transmitting and validating transactions on the network. But what is it really? Focus on the consensus that is the Masternode.

What is a Masternode?

Masternode or "master node" in French is a computer server set up to validate transactions and ensure the security of a blockchain of a cryptocurrency. Having first appeared in 2014 with the DASH cryptocurrency, it aims to bring more functionality to the blockchain. Subsequently, many projects were then inspired by what DASH did and now use Masternodes.

If previously crypto currencies were based on Proof of Work or proof of work to ensure the operation of a blockchain, the arrival of the Masternode has put in place the concept of Proof of Task or proof of stake. They are therefore a special category of nodes ensuring the proper functioning of the blockchain in Proof of Stake by storing a copy of all the data and validating the transactions carried out on the system. It contributes to the security of a blockchain but also constitutes passive income.

How does a Masternode work?

The Masternode is part of the consensus in the category of Proof of Stake or proof of stake. Thus, it works on the basis of the proof of stake protocol which consists of putting into play a given amount of cryptocurrency also called collateral. The investor will therefore have to acquire these tokens and put them on a crypto wallet in order to implement the consensus.

Then, the user will have the choice between two alternatives:

• Either he himself hosts the server on which the node will run
• Either he calls on a specialized company to assist him in setting up and maintaining the server.

Once activated, the server will contribute to the operation and development of the network by validating transactions. As blocks are created, the user will be rewarded with tokens granted by the network based on validated transactions. These reward tokens are also called Reward.

Characteristics of a Masternode

• Enables improved confidentiality and speed of transactions
• A very good return on investment
• Provides the ability to have more control over blockchain governance
• Generates additional costs and work

How to Choose a Masternode?

To make the right choice, there are several things to consider:

• Define project objectives
• Determine the team behind the Masternode
• Find out about the volume of liquidity available
• Find out about the reputation of the concept

Once you knowvantage on these points, you can get an idea of ​​the potential of the project and the interest in investing in it.

Avantages and Disadvantages of a Masternode

Own Masternode and Shared Masternode

There are two types of possible Masternodes for investors:

• Own or full masternode : it is aimed at investors who wish to invest a fairly large amount of money.
• shared masternode or "shared”: This is the best alternative for rather modest budgets. Indeed, it is a question of investing in split masternodes in order to somewhat limit the investment risks.

Conclusion – Why Invest in a Masternode?

The first reason that can push an investor to use a Masternode is first of all to have the possibility of participating in the life and operation of the network. Indeed, the role of the node will be to improve network security while ensuring the implementation of projects. But the consensus is not limited to the operation of the network, it also allows good governance and stabilization of the price of the tokens generated.

By investing in a Masternode, you build up an interesting passive income, which seems to be even more affordable.vantageux than mining profits. The investor receives remuneration in return for the contribution made to the network. The yield varies between 5 to 25% in the context of reliable projects. Sometimes the return can reach up to 100%, but the projects remain very risky in these cases. In addition, within the framework of a Masternode, the investor can stop at any time and recover their collateral. However, you must remain vigilant, because even if the number of tokens won increases, your gains mainly depend on the value and price of the cryptocurrency on the market.

What is the Masternode?

The Masternode or master node is an interconnected machine which, thanks to an integral copy of a network, makes it possible to validate and transmit the transactions which cross it.

❓Who created Masternodes?

Masternodes were born thanks to the DASH cryptocurrency in 2014. With the aim of creating a second level of mining, Evan Duffield came up with the idea for the server. Following the rather positive results on the consensus, other developers decided to apply the same system on their blockchains.

Can you make money with a Masternode?

Each masternode allows an investor to receive compensation according to the return on his investment. However, the profitability of the consensus depends greatly on the volatility you agree to invest. For some time, however, Masternodes have tended to replace cryptocurrency mining.

Which Masternode to Buy in 2021?

There are several Coin Masternodes available on the market, although not all cryptocurrencies have them. The most interesting projects are: DASH, ZCoin, Divi, Pivx, ZelCash and SmartCash.

How much does a Masternode cost?

The price of a masternode varies according to the project and especially the course of the cryptocurrency. As the price of crypto currencies evolves according to the market, the cost of the masternode will also do the same. But if you want to know how to make a MasterNode, know that you have to start by buying tokens to constitute the collateral. In order to deal with any eventuality, plan an additional number of tokens to cover transaction costs.

What is a Crypto Node?

It is a node that is part of the cryptocurrency blockchain network and has the main role of running the crypto in question.

If you have any questions or thoughts to share about the Masternode, feel free to write to us in the comments!