Masternoding

General Questions

Masternoding General Questions

Frequently Asked Questions

An alternate way to earn revenue is by providing technology (a master node) that relies on a proof-of-stake (PoS) approach.

A master node, like any other full node, is a node server within a network, and full nodes are important because they process transactions and store them in the blockchain.

However, a master node operator has rights beyond those of a normal full node operator, and is required to manage more critical tasks – bringing the operator higher rewards.

In order to obtain the status of a master node, the master node operator must deposit a specified number of the relevant coin. For this “staking”, along with performance of the required tasks and the provision of computing power plus storage space, the operator receives rewards based on the corresponding coin (proof-of-stake).

By operating appropriate master nodes diligently whilst constantly monitoring and optimizing with clever strategies, extraordinary profits can be realized.

In addition to the advantages of the blockchain as a technology, it is possible to achieve interesting yields by providing computing power and storage space in combination with special software.

In recent years, “mining” based on proof-of-work consensus (PoW) has been very popular – especially with Bitcoin.

However, with more and more miners competing, an ever-increasing technology investment is required, along with an ever-increasing amount of energy.

This has made mining significantly less profitable than it once was, and can often be unprofitable when electricity costs are considered. More pertinently, the impending “halving” of Bitcoin will instantly reduce mining returns by 50%!

Masternoding is NOT trading, so loss of capital is highly unlikely. Naturally, there are expenses, but servers are rented and contracts can be cancelled.

Clearly, fluctuations in coin prices affect the market, and master node earnings are always in coins, but Urs and his team monitor the master nodes constantly (24/7) and are able to react quickly to any events that might impact the yield.

Since the deposited stake becomes free again when a master node is switched off, Masternoded can pay back deposits at any time.

If you have more questions contact us here.