Today Masternoded will take a look at some of the most frequently asked questions on google about the Blockchain industry. Our goal is to define some of the most frequently searched terms on the blockchain and to explain them in ordinary language so that even if you are 90 years old you will read and understand.
- What is Masternoded?
Masternoded is simply the trading name of Masternoded.com, a passive income platform on the blockchain. The platform provides server rental services for the blockchain and enables clients to masternode cryptocurrencies. The platform began in 2018, and went public early 2021 and supports over 5000 servers on the Ethereum blockchain.
- What is a Masternode?
A Masternode or full node is a node that allows an operator to perform core operation functions on the blockchain like validating transactions on the blockchain and contributing to the governance of the blockchain. Because of these contributions the masternodes are rewarded with every new block of coins.
- What is Masternoding?
Masternoding is the process by which an operator(individual or firm) locks up a certain number of coins on a particular blockchain, thereby creating a masternode. This masternode then forms the basis for the validation of new transactions on that blockchain, governance and voting, thereby leading to the operator being incentivised with new coins from each new block created.
Masternoding today has been used to replace the proof of work (POW) concept on some blockchains. The pioneer of masternodes is Dash.
- What is Proof of Work (POW)
Proof of work (PoW) is a decentralized consensus mechanism that requires members of a network to expend effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system. Through this work new blocks of coins are created and distributed to all those who contributed in solving the problem.
- Proof of Stake (POS)
The Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins they hold. This means that the more coins owned by a miner, the more mining power they have. This is more energy efficient in creating new coins than proof of work.
- What is Defi
Defi stands for Decentralized Finance. This is a new development of the blockchain industry which is aimed at getting a financial transaction from a sender to the beneficiary without going through a third party. It is targeted at decentralising financial flows from the regulatory power of the governments and the dictates of the various governments and financial institutions. For example, in the present economy, if a someone owns a bakery and accepts card payments, each time a customer buys an item like bread, cake or sandwich, the money doesn’t go directly to the baker, or owner. The money moves from the buyers bank, through the card provider like Visa or Master, to the Bakers banker, the two banks at anytime could reject the payment and cancel the transaction. Even when the money is credited to the Bakers account, the bank could recall the money.
Defi is meant to take out all the middlemen and get the money from the buyer to the baker directly, without any opportunity to recall the funds once confirmed. This is done using smart contracts.
- What is an NFT?
FT stands for non-fungible token. Fungible means something that can be replaced with another identical item. Money is a good example for explaining what fungible means. NFTs work as a digital license. They give you ownership of digital products.
An important thing to note is that NFTs only give you the right to use the product for non-commercial purposes.