Masternodes for Passive Income

Masternodes for Passive Income

Image taken from Pixabay.com

Masternodes are servers on a decentralized network that collectively support the ecosystem of a blockchain’s network. They are responsible for enabling services for the network that miners cannot accomplish. Functions like private send, direct send and instant transactions are some of the services that masternodes provide for a cryptocurrency coin’s network.

What are Masternodes?

Image taken from Pixabay.com

Masternodes operate under Proof of Service (PoSe) and are servers that provide crucial services to the network of a coin. Masternodes have the power to reject improperly formed blocks from miners and offer services like private send, direct send and instant transactions. By staking a certain amount of coins in a node, the owner becomes part of a community with the shared desire to maintain the network and the value of a coin. These nodes validate, secure, and grow the blockchain for the coin; and so, minted coins are payment for these services.

Not all cryptocurrencies offer masternodes to their network; and similarly, not all masternodes offer the same amount in daily rewards. Investors are incentivized to operate a masternode by earning percentage of the blockreward shared amongst the total number of masternodes in operation of the network. In this way, people making passive income by running masternodes. The passive income that node holders are earn is in the form of coins awarded from the blockreward. The assembly of a masternode requires that a certain amount of coins be purchased and locked into a single public address for staking. The coins remain in that address and software for the masternode is setup by the owner on either a VPS server or on a personal computer associated with a specific IP address.

Masternode Statistics

Masternode statistics taken from MasterNodes.online

Websites like MasterNodes.online and MasterNodes.pro are especially useful for calculating return of investment and daily passive income that can be earned from staking and running a node. Keep in mind that these statistics are dynamic and ever-changing--just like all statistics, one cannot rely on these statistics as an exact amount of much can be earned. These statistics provide a snapshot in time of how much one can make at any given moment. So, exactly how much can masternodes earn?

The answer to this question is dependent on several factors:

• The specific masternode coin being operated
• The blockreward of a coin
• The amount of masternodes on the network
• The value of the coin and how much it appreciates in the future

With that been said, let’s move on to what to look for in a masternode coin before investing.

Typically, one should look for a coin that has the following attributes:

1. Working desktop wallet
2. Listing on CoinMarketCap.com
3. Traded on reputable exchanges with plenty of trading volume
4. Active and helpful developers
5. Large or growing community
6. Functionality other than just being a masternode coin
7. Appealing name or branding

Masternode Hosting

Screenshot from Vultr.com

If you are still interested in running a masternode, it is wise to run it on a virtual private server that offers VPS hosting for the masternode operation. There are several VPS hosting websites, but of the more popular options, there is Vultr, AWS and Digital Ocean. Of these options, Vultr (https://www.vultr.com/?ref=7298581) seems to be the most trusted, reliable and inexpensive VPS hosting website to use. Prices for Vultr are as low as $2.50 per month and there are many affiliate opportunities for getting paid by helping others sign up. If you use my link I will get a $5.00 credit!

Conclusion

Image licensed under Creative Commons

Setting up and operating a masternode may require some technical skill, but even the least skilled can set up a masternode on a VPS by simply following the directions provided by the coin’s developers. A Windows-based masternode would be the easiest to set up by far, but don’t be intimidated to set up a Linux-based masternode as it’s as easy as running the right commands in a Linux console. If you haven’t been discouraged by the information provided thus far, please continue to further investigate masternodes as a source of passive income.

If this article has been entertaining or informative for you, please follow, upvote and resteem. Also, please use my link to Vultr and sign up to run a masternode on a VPS: https://www.vultr.com/?ref=7298581.
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