***This important introduction to Masternodes and their importance in the crypto community was penned by @CryptoKooks and forwarded to us in the hopes that crypto curious and those new to the space will have a reference point for one of the more profitable, but lesser known, aspects of crypto.
One of the most common things I hear from new investors entering this space is how they wish they had invested in crypto when they first became aware of it. Whether it was a friend who had mentioned bitcoin, or perhaps they even owned some coins and prematurely exited their position for whatever reason. Reason being is the earliest wave of crypto investors have been the biggest beneficiaries, and both their portfolios and wallets are likely to reflect this. For those of you looking for similar type gains, if someone were to ask me today what type of investment offered them the highest potential upside, I would look no further then masternodes.
We’ll start by explaining what a masternode is and how they work. In the simplest of terms, a masternode is a server on a decentralized network. In order for a server to become a masternode, you must store a relatively large amount of coins in the specific coin’s wallet at all times. The masternode is designed to secure the coin’s network as well as perform specific network tasks and in exchange, you’re compensated with additional coins. The block rewards and the number of coins required to start a masternode vary depending on the coin. To provide an example of the start-up fees as well as the rewards, at the time of writing this article, a single Dash masternode cost just over $600,000 USD while providing a nearly 8% ROI. Meanwhile, some lesser known masternode coins cost significantly less to start and can offer much larger returns.
Now that we’ve broken down how a masternode works, let’s look at how we’d go about researching them. A lot of masternode coins are not available on some of the larger and more trustworthy exchanges. I would start with checking to see if the coin has it’s own discord or telegram group, as this can serve as an incredibly helpful resource that ranges from important announcements, how to acquire the coin, to instructions on how to ultimately set up your masternode. As a rule of thumb, I find the stronger the community support tends to be, the more confidence I end up having in my investment.
As I briefly touched on, no two masternodes are created equal, as each individual network has its own pros and cons. There are currently nearly 150 different coins to choose from so it can be overwhelming getting started. I feel it’s necessary to emphasize the importance of researching a coin very thoroughly due to the large initial investment that’s often required, in addition to the likelihood that a lot of these coins could possibly qualify as pyramid schemes. Some clear red flags to look out for are if the coin is offering an unrealistic ROI percentage, the developers are anonymous, or a lousy website coupled with a quiet or non-existent community. At the end of the day, it’s important to remember that there is no such thing as a sure bet and to always consider all of the potential risks involved.
At the end of the day if you have the necessary capital it certainly provides a unique investment opportunity. It is my belief that crypto projects with masternodes will only attract more and more investors in the future, having a great chance to outperform currencies without masternodes in the coming months and years. Like everything else DYOR and invest wisely!