What is Masternode Cryptocurrency?

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Masternode Cryptocurrency

Anything that is prefixed with the term ‘master’ adds a touch of awesomeness, and Masternode Cryptocurrency falls in the same line. Before we go on to understand what it is, throwing some light into what it can do is bound to make everyone curious about what Masternode Cryptocurrency is.

The Growth Hack of Cryptocurrency World

Warren Buffet has said, “If you don’t find a way to make money while you sleep, you will work until you die!” If passive income generation is one of the goals of your involvement in cryptocurrency, Masternodes are the key.

Now that your attention has been grabbed let us go on to find out what exactly Masternodes are!

What are Masternodes?

As we all know, blockchain is a decentralized network. A Masternode is a server on a decentralized network. It is a cryptocurrency full node or, more like, a single-computer wallet that keeps a full copy of the entire blockchain.

Masternode Cryptocurrency

Masternode Cryptocurrency


Unlike other nodes on the blockchain, a Masternode can perform added functions like:

  • Increasing transaction-privacy
  • Effecting Instant Transactions
  • Participating in Governance and Voting
  • Enabling Budgeting and Treasury systems on the blockchain

Just like the classical server, the Masternodes are always in communication with other nodes, and it is this communication that upholds the value of decentralization.

Requirements to Run a Masternode

The entire aim of the blockchain is to democratize everything it is involved in, and on these lines, it is only right that Masternodes can be run by anyone. However, it requires a sizeable investment because of its enhanced capabilities. It is the only factor that makes Masternodes not everyone’s cup of tea, not because they can’t drink but more because they can’t afford it!

The word ‘investement’ is highly relevant because investing in running a Masternode guarantees earnings from portions of block rewards in whatever cryptocurrency the Masternode is facilitating.

The other requirements are:

  • A stipulated minimum amount of coins in that cryptocurrency. For DASH – the cryptocurrency that pioneered
  • Masternodes – you need 1000 DASH Units.
  • A VPS or a server to host the wallet without downtime.
  • A dedicated IP address for the server
  • Adequate storage space to save the entire blockchain

The first requirement is of vital importance here and is only in place so that the ‘committed’ or the ‘invested’ amount (the stipulated minimum) acts as a deterrent for the owner of the Masternode to cheat or corrupt the system.

It’s quite evident that Masternodes turn into lucrative investments… and the investment surely is capital-intense.

Why pay for Masternodes?

No business model pays for existence – it’s the utility that gets rewarded. Masternodes aren’t just about servers. The masternode system improves the blockchain by splitting it into two networks – one works like a regular network, and on top of it, the other incentivized network of powerful notes provides the higher-level infrastructure. While the ‘upper’ network works on the proof-of-work, the ‘lower’ network does all the calculations regarding the transfer and the incentives.

The Masternode treasury also enables a community to coordinate resources and efforts to develop the network, so there is no need to beg for external sources for funds. In most cases, many cryptocurrency networks have dedicated a part of their rewards to funding bug bounties or even controversially revolutionary projects like genetic research on hemp.

The Dark Side of the Masternode

Just like the Pink Floyd reference in the sub-heading, even if the words might sound threatening, the outcomes aren’t! It has to be agreed that in a network of nodes, when one computer with superpowers alone hosts the entire blockchain, there is a negligible-yet-nonzero touch of centralization, which falls outside the philosophical scope of the blockchain. However, many crypto users and most Masternode advocates call it an acceptable compromise for the gain in efficiency.

Masternodes, when working in tandem, theoretically can cheat a system, but in practice, it is impossible to coordinate a conspiracy among the thousands of Masternodes and even more so to isolate Masternode owners with malicious intentions.

Building a Masternode

Building a Masternode requires Linux programming knowledge. However, it is the non-technical and business aspects of building one that makes it a challenge. You can entrust the building of your Masternode to trusted organizations like Blockchain App Factory, and we will do the hard work of choosing the right cryptocurrency and configuring the hardware so your investment remains an investment and doesn’t slip down into the territory of being just a ‘spending’!

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