This was going to be initially just a tweet, only 140 characters ... but I entertained a little....
Summer, August, Monday afternoon and this bearish market ... The best thing to do is write for a while ... (No comments, please).
This morning I wrote a survey via twitter asking how many times you were scammed or lost more than 70% of your investment in a masternode.
I gave 48 hours of validity to the survey, but the results are starting to be quite stable, and I am very concerned about the issue:
I accept that there may be interpretations about the question, but my intention was to ask about scams or failed projects and the consequent loss of most of the initial investment. I may have put it wrong, I do not argue it.
But back to the initial topic, the survey and their answers:
The answers seem clear, around 50% of respondents acknowledge having lost more than 70% of the investment in a masternode project between one and three times ... .. this, dear friends, market does not mind, is insane.
So I will try, from my limited knowledge, to explain a couple of concepts that I learned, in some cases, losing money.
WHAT IS A MASTERNODE?
We already explained that, in broad terms, in this article:
https://steemit.com/masternode/@s7de9/wtf-is-a-masternode
WHAT ARE THE REWARDS?
The rewards are the income you receive from the network for having your masternode at the service of them.
They are income, regular, certain and measurable that depend on an algorithm.
It is true that some algorithms introduce a % randomness in the rewards received, but in the end the variance will take you to a certain long-term figure.
HOW TO KNOW REALLY HOW MUCH WILL I COLLECT? WHAT DOES IT DEPEND?
It depends on 2 factors mainly:
- The logarithm that calculates rewards and changes in Block rewards.
- Number of active masternodes.
Calculation of Block Rewards:
Each masternode has stipulated, from the creation of the code, certain payments depending on the block in which it is located, so that, knowing the block in which we are, we will know how much we are going to charge for having the masternode, this is the example of Myce ($ YCE)
We are currently in block 316,900, which means that each block is receiving a payment of 75 MYCE, of which 80% goes to the Masternode holders and the remaining 20% goes to the stakers.
In this way we know that each Masternode is receiving 75x80% x block = 60 MYCE per block.
We will do the explanatory calculation with Dash, since a large part of the existing masternodes to date are a copy of that code.
- Currently each block generated from Dash pays in the following proportion:
- 45% Miners.
- 45% Masternodos.
- 10% Gobernance.
*In practice, half of the reward from a normal block goes to the miner and half to the masternode. Then, every 16,616 blocks (approximately 30.29 days), a superblock is created that contains the entire 10% payout to the budget proposal winners
-The block reward is approximately 3.34 Dash, so the selected masternode receives 1.67 Dash (3.34 x 50% = 1.67) per payment or approximately 6 Dash per month.
-The block reward decreases by 7.14% approximately once per year, so the annual return on investment (ROI) to a masternode owner is approximately 7% and will decrease over time.
You can see estimates of the following changes in their rewards here:
https://docs.google.com/spreadsheets/d/1HqgEkyfZDAA6pIZ3df2PwFE8Z430SVIzQ-mCQ6wGCh4/edit#gid=523620673
Every masternode appears in the global list. Their position in this list is determined by their time since the last payment according to the network, not the blockchain.
New masternodes joining the network and masternodes receiving payment are placed at the end of the list.
Once a masternode reaches the top 10% of the global list, it is eligible for selection from the selection pool.
Currently there are about 4,850 Dash masternodes activated and working.
The more masternodos there are, the more difficult it is to enter the list of that 10% of Masternodes who receives rewards, so it will take us longer to receive new incomes.
This table explains the relationship between time (blocks), ROI and Dash Masternodes number.
This graph (from another currency) explains it clearly.
We can see that as the number of Masternodes increases, the ROI decreases.
WHAT IS THE "PREMINED"?
Premining is when developers/founder of a coin, , get to mine a coin extensively before public release. Is a dangerous game.
Is is used to be done to sell some of them to early investors and get with it some Money to pay the Exchange or another service fees.
Also, some coins are kept by the Core Team to sell them later to pay new developments, advertisement campaigns…
There is no true and real prediction about what % that we can define as acceptable, but generally it does not exceed 5%.
PRESALE
Sometimes, when a project is going to be launched but does not have funds to pay for advertising, exchanges, web tools, or third-party services, it makes pre-sales.
This is selling directly to investors a part of their pre-mined, so that buyers can set up their masternode a few days before going to the Exchange and get higher ROI.
OPINIONS AND CONCLUSIONS
Now that we have clear (I hope) some concepts, define a strategy, clarify ideas and avoid, as far as possible, to be fucked again.
(Everything expressed here are my own opinions, you may not agree with them, I'm wrong too sometimes)
- Presale: Unless you really know the team or the founder or the developer and ALL THE BUYERS and they are honest people who know what they are doing and looking to your eyes they tell you they do not want to fuck you, do not buy in presale NEVER.
In 98% of the times you will lose money since like you, another 10 more have set up their masternodes with 50,000% ROI and when you arrive at the Exchange there will be no demand for the product able to buy everything you have, so the price will sink.
In addition, the more time between the buyers have the masternodes and the coins arrives to the Exchange, worse, since more coins will be there for dumping.
This is usually the most common graphic:
- Before investing in a masternode, please, lose 5 minutes of your life and search (I know that sometimes they make it hard) the changes in the block rewards, usually in the White Paper. Your pocket will appreciate it.
Why? Very simple, when you enter early in an investment in a masternode, and the ROI is still high (I mean more than 250% aprox) the vast majority of investors in Masternodes care very little about the project, the actual use of the currency / token or the long term. They are only while the ROI is high. As soon as there is a change in rewards and a decrease in ROI is approaching, they will abandon the project and dump the price, without exception.
This does not happen in advanced projects or that have already had several declines in ROI, since it is another type of investors who are looking for more sustainability, security and long-term profit based on growth in the price of the currency.
Always look for the real use of the project. Ask yourself, would I buy this if it was not a Masternode coin? Would you invest here? If the answer is no, simply forget it.
If the currency is anonymous, decentralized, safe and fast .... and It has an 800% ROI and nothing else, just forget it, it's one more, it's a ponzi scheme. If you dare enter, invest, but please, do not be the last to sell.
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Thanks!!!!