What is a Masternode and why should I have one?
Many of you involved in the Cryptosphere or considering investing may have heard of the term Masternode and be wondering what a Masternode is?
In these articles I hope to open your eyes to the world of Masternodes, explain what they are, how they work and how to avoid the bad ones. None of these articles should be considered as investment advice however and you should always DYOR (do your own research).
What is Masternode?
Before I explain what a Masternode is it’s worth spending a little time running through the different types of blockchain out there and which ones support running a Masternode.
Blockchains, in broad terms, break down into three types. POW (proof of work), POS (proof of stake) and a mixture of both.
Each of these blockchains must have a mechanism for processing transactions which allows the blockchain to function.
POW blockchains, such as Bitcoin, are underpinned by ‘miners’ who process transactions by ‘mining’ blocks which are then added to the blockchain. Without going into the technical detail in too much depth the mining of a block is achieved by the miners ‘rig’ (which is a Node specifically designed to process data at a very high rate) guessing the answer to a puzzle. The first mining rig to guess the answer to this puzzle correctly wins the right to mine the block. Once a block is mined the miner is also rewarded with, in this case, Bitcoin. Unfortunately, POW systems are very energy-intensive and the crypto industry is slowly moving over to an alternative, more energy-efficient, type of blockchain called POS.
POS blockchains are underpinned by Masternodes. These are Node which process transactions on the blockchain and as a result are rewarded with coins from the blocks being created. Nodes sit on the blockchain, normally within a queuing system, and when they reach a certain position in this queue can be selected, at random, to be rewarded for participating within the network. As a result of this rewards can appear at different intervals but usually average out over time.
Why should I run a Masternode?
Masternodes provide the opportunity to invest in Cryptocurrencies with the added benefit of earning guaranteed extra coins in addition to gaining exposure to the large potential increases in value that can come within the Cryptosphere and owning cryptocurrencies.
So, what can go wrong?
Well, as with any investment there are risks and these can be significant within the Masternode world. Since the beginning of 2018, there has been an explosion in the number of Masternode coins and unfortunately, this has also attracted a fair number of scammers to this space.
OK, I want to run a XinFin Masternode. What’s next?
So now we know at a basic level what a Masternode is I’ll now explain in more detail how to set-up a XinFin Masternode and get a high passive income.
As explained previously a Masternode is a Node that processes transactions on a blockchain and, as a result, is rewarded with extra coins for doing so and makes a high passive income.
As you can probably appreciate the developers of any given blockchain want those running nodes to do so in a responsible fashion. They also want to ensure node owners do not try to disrupt the blockchain for personal gain.
This is achieved by requiring a node owner to hold a certain amount of coins to ensure they have a vested interest in the blockchain and thereby ensure they run their node in a responsible fashion.
For this example, we’ll assume the required collateral is 10 million XDC and we’ll discuss running your node in what is called a Docker compose setup — this is the most common setup used and the one I use for all my nodes.
In very basic steps this is how you set-up your node (you will find more detailed guides for each node usually on the website or ask for help from the Telegram developers community group):
1- Buy 10 million XDC from alphaex (always buy slightly more to cover transaction fees both from the exchange and in your wallet) and no worries if you hold xdce you can swap xdce to xdc from alphaex which is 1:1 ratio.
2- Set-up the node. You will have a choice whether you do this on a personal server or at your home/office PC. But I recommend to set up your masternode on the server as your node requires 100% uptime and requires static IP. The most commonly used providers are Indsoft, And if you are a non-technical person you can host a masternode as a third party masternode with indsoft. You do not need to do anything all the maintenance and setup will be done by the indsoft team.
3- Once the server has been built and you have installed and configured the XinFin-Node masternode you are ready to start the server. You will need to start the node at the server. The server will then synchronise with the blockchain at this point.
4- After setting up masternode properly and your node is synced properly then you have to send your XDC from alphaex exchange to XinFin web wallet
5- After that, you have to upload kyc on the masternode app and propose the masternode and lock 10 million xdc.
6- At this point, the node will be running and you will start to receive rewards.
I hope the above has opened your eyes a little into the world of Masternodes.
Useful link for XinFin Masternode
Here is a link on How to setup masternode.
IndSoft System partnership with XinFin for hosting masternode: Click here to know more about partnership.
Guide to setup node with one click installer
For any instant support from indsoft join Inddsoft Telegram Group.
For any instant support join XinFin Telegram Group.
