What is Masternode and how does it work?
PayDayCoin last edited by PayDayCoin
The crypto gold rush is ongoing, but buying bitcoin and waiting for its price to go up is no longer enough to get a sufficient piece of the pie. Even mining is nothing compared to what it used to be. However, the crypto world still has ways of generating stable income and one of the most interesting among them is creating a masternode. The PayDay Coin project works on a masternode network, and today we would like to tell you what is a masternode.
A masternode is a full-fledged network node for any given cryptocurrency. The more masternodes there are on a network, the more secure it is, the faster transactions go through (up to the point of almost real-time transaction speed), the more features can be implemented.
Creating a masternode costs money and is often expensive, as a result, their owners are well-rewarded. This mutually beneficial agreement helps cryptocurrency develop and grow while offering an additional source of income.A masternode is an always-on and always online computer (ideally – a server) that has a static IP and is running cryptocurrency wallet software that is fully synchronized with the blockchain. Besides the hardware costs that can run up to thousands of dollars a much bigger expenditure is often the cryptocurrency itself. To run a masternode users must purchase in a specific amount to deposit into the wallet as collateral. The size of such collateral varies from coin to coin, but it is always a considerable amount of money. As long as the masternode is running, the collateral can’t be withdrawn, however, when the user decides to stop supporting the payment network that they can transfer and sell the coins from the wallet.
What’s the profitability? It varies from coin to coin but on average a user can expect about 0.1 to 0.5 coins per day for a running masternode, given the deposit is at 700 to 1000 coins. Considering the size of the initial investment, it’s not that much, since you can terminate your node and get all your coins back at any time.
To summarize, it’s clear that masternodes make for a relatively effective passive source of stable income, that interests users who can’t or choose not to constantly monitor the state of the crypto community or trade on crypto exchanges frequently.