A few years ago I swapped wonderful Hamburg (Germany) with rural Australia and I have not regretted it yet 😉
Living rurally has the drawback of not having much opportunity for presonal exchange, so I am looking for like-minded poeple at steemit now!
In Australia I came across BITCOIN the first time and - I have to say - what an awesome rabbit hole that is. Can't get out of it.
In my first (english) post I would like share my thoughts on Investing in Masternodes and why I think, that this could be the deal of the year. My article is suited for interested folks with no or little experience. However, there is some new infos for old hands, too.
Some defintions, before we get into it...
What the heck is a masternode?
Masternodes are virtual decentralized servers, that keep a copy of the blockchain and perform supportive services for transactions. Only some coins use masternodes, though.
Why should I bother?
Running masternodes costs money, but these costs are reimbursed by the coin community with reward payments. Those payments are usually bigger that the actual running costs.
How can I participate?
To run a masternode you need a certain amount of coins, called collateral (usually 1000, 5000, 10000 or even 100000 coins).
How secure is my investment?
The coins are 100% secure, because your coins never leave your own private wallet!
What else can go wrong?
You are investing in a coin, so the value could decrease.
Sounds like a scam!
Yes and no. Unfortunaley, there is a lot of black sheep out there since the topic is new and intransparent for outsiders. If you stick with established projects, you should be good.
So, now let's get into it!
BANGER 1:
Until a few months ago, running masternodes was only reserved to people who know how to rent and operate remote servers with command prompts and scripts. Not everybodys cup of tea.
Real nerds.
Since the end of last year, though, new providers have emerged that are specialized in so called 1-click solutions for very competetive prices. Wow! Now everybody with normal computer knowledge can participate and run nodes because it has become so simple. I would like to introduce you to the largest and most promising provider further down, called ZCore.
BANGER 2:
The bear market for Bitcoin and altcoins ist still in full swing. Most portfolios are down 95% or worse, if you bought in 2018. Bitcoin might have developped a bottom recently and might start getting bullish in the next months. Altcoins might follow Bitcoin in an uptrend. When you invest in a masternodes, you might profit twice. First by the rise of the value, second by the continuous reward payments.
THE TIME FACTOR
Similar to Bitcoin, rewards for masternodes will generally decrease over time, so that profit is getting smaller and compound interest fades away quickly. Also, rising coin prices will increase the amount of collateral you will have to pay for one masternode. This might get too expensive at some stage.
The best example is DASH. If you want to buy a DASH masternode today, it will cost you about $120,000. The annual interest is currently at about 6% so that you'll earn passive income of over $7,000 a year. During the bull run in 2017 one node was worth over $1Mio. Back in 2016 a whole masternode could have been picked up for $10,000.
Now seems to be a very good chance to get into established masternode projects. Let's summarize:
1. Masternode hosting has never been easier than today, since 1-click hosters only exist since a few months
2. The market of masternode hosting is very innovative, but also fiercly fought over. That keeps prices down.
3. There is many established masternode projects available, that are not expensive and still offer good rewards
4. We are in the in the middle or the end of a bear market and there is good chances of rising prices
5. Reward payments are only ever decreasing. Only the early investors can leverage compound interest.
Masternodes are still a small rabbit hole, but the growth rates are vast. The total amount of running nodes has increased from 0 in 2014 to 250,000 today with a total value of $780mio. https://masternodes.online/
IN MY OPINION THIS IS THE DEAL OF THE YEAR!!!
As a BONUS I will provide a guide that should allow anybody to get into the masternode business.
1. Choose a masternode coin project
Go to https://masternodes.online/ and sort by volume, descending. Only projects with high turnover are established. Ignore all coins with ridiculous interest rates (ROI >100%), because those are too young. Do your own research!
2. Get a desktop wallet
Download the desktop wallet from their homepage and let it sync. It needs to download the hole blockchain onto your computer (lot of internet data and disc space). Encrypt your wallet with a passphrase and store the passphrase in another secure location.
3. Buy coins at an exchange
Register with an exchange and buy the amount you need for the collateral. Then transfer the coins to your wallet. I use CryptoBridge a lot and I can really recommend them. No KYC for non-US-citizen: https://wallet.bitshares.org/?r=outback-trader#/ Please consider to buy some extra coins to cover transactions costs from the exchange to your wallet!
4. Choose a masternode hosting provider
Have a look at https://masternode.buzz , they did a review on providers.
I would like to recommend ZCore, they are now the largest and most professional provider in the space.
https://central.zcore.cash/mn-coins/3893
As a newcomer they have overtaken other hosters in no time. ZCore offers many advanced features, that you will only find there. Fees are as low as $1.99 per month. All following instructions are related to ZCore.
https://central.zcore.cash/mn-coins/3893
5. Establish you masternode!
After you register and login, click on COINS and choose your desired coin. Currently there is 122 different ones available. Then click on "Create Masternode". Now just follow the instructions.
The following steps include:
- Generate a new address within your desktop wallet
- Send your collateral from your wallet to yourself using the address you just generated
- Copy the transaction ID, the output-index und the address and enter them in ZCore
- Generate the masternode key string
- Copy the masternode key string back into your wallet (masternode.conf file)
- Start your masternode from your wallet
- Wait until your masternode has been recognized by the other nodes in the net and shows up as "ENABLED"
DONE!!!
ZCore provides a tool to monitor the status of your nodes on the web page. Just recently the ZCore app was released so that you can access the status of your nodes on the go and much more.
Now let's talk about rewards!
The frequency of reward payments differs between hours or days. The first reward usually takes a bit longer. 😜 All reward payments will go straight into your wallet, your wallet doesn't need to be started or be online, though. Some coins offer staking rewards when you leave your wallet connected to the internet, but that's a different topic alltogether.
CONGRATULATIONS! YOU ARE A MASTER OF NODES NOW!
In case you have questions, check the free Discord channels of the chosen project. Usually, there is an invite link on their homepage available. Most communities are very helpful and answer questions within minutes.
I am also happy to help out, but I am just a beginner myself....
GOOD LUCK! ! !
Thanks for your time in reading my post!
***My post is not financial advise! Do your own research and only invest money that your are able to loose. Investments in cryptocurrencies are risky. There is many ways to loose your coins, e.g. scammers, hackers, lost passwords, crashed computers...