A challenge with investing with masternodes is the amount of initial investment needed. This ranges anywhere from a few hundred dollar to hundreds of thousands. Masternode pools provide a way to reduce this initial investment by pooling the funds of several investors together to create one masternode.
Risks of Masternode Pools:
- When you invest in a Masternode pool, the only thing you own is an IOU from the site. That IOU is only useful as the website keeps working. The golden rule in crypto is hold your private keys
- Pools can be hacked, or just exit scams. We do not know much because documentation on them is scarce.
- These Pools probably need some license, and they do not declare to have any on their sites, they could be shut down by the goverment tomorrow.
- They are an excellent way to get the hang of the process of masternode rewards
- They can help you diversify among masternodes rather than lumping all your money into one project.
- These sites can be an excellent way to put your masternode coins to work before you have the full coins for a masternode.
- If you own a masternode, then the profits can be deposited to accumulate more returns for more passive income.
- No wallet management, no need to upgrade
- You might lose all your investment and feel guilty for a long time if you loos your money because the Pool disappears or the site is hacked.
- There is a ton of shit nodes listed on these pools.
- Your coins once deposited join a queue, and they start only earning a passive income when they enter a masternode. This happens either because someone has withdrawn their funds from a node or because enough has been deposited to create a new node.
- When you join a pool, the masternodes being created are centralised, which goes against the ethos of a decentralised cryptocurrency
- They have been around May 2018.
- No much coins have been added in the last few weeks.
- They have an excellent clear dashboard showing the daily rewards and the fees taken.
- A minimum is required to invest in a Pool.
- I have personally used my node rocks (this is not a recommendation) and have found the site easy to use, and when I made the withdrawals they did come in.
- The site has an email 2FA system to log in and when logging in from a new IP
- Minimal information on the site about the masternodes listed.
- The fees vary from coin to coin by they run the maximum fee is 10%. - It is free to deposit/withdrawal coins.
- This service offers both systems of passive income: Crypto Staking and Shared masternode pools
- Easy to use interface
- Multiple masternode runnings
- Users on the internet reported that their system of deposit, withdrawal and the system of generating and sharing masternode profit sharing seems to work.
- It is free to desporit/withdrawal coins.
- Manual withdrawal which can take up to 24 hours to process
- No Dashboard to track returns
- Pools Staking (3%) and Masternoding (5%)
- Offers both shared maasternodes and Coin Staking Pools
- This service offers both systems of passive income: Crypto Staking and Shared masternode pools
- Slick interface
- They have multiple masternodes from different coins running
- Based in Germany
- Fees:
| POS | MN | Instant | |
| Reward | 3% | 5% | 7.5% |
| Deposit | 0% | 0% | 3% |
| Withdrawal | 0.1% | 0% | 0.2% |
- Offers both shared maasternodes and Coin Staking Pools
- Limties choice of masternodes.
- Slick dashboard and interface.
- It is free to deposit/withdrawal coins.
- 5% fee on the income, No Withdrawal Fees and No deposit fees!
Mastenode pools are very very very risky. YOU MIGHT LOOSE ALL YOUR COINS AND PROFITS IF SOMETHING GOES WRONG. When you invest in them, you need to pick the right project by avoiding the masternode scams carefully, (even if their returns are outstanding) constrained the masternode business risks. On top of that, these websites seem to be unregulated and a honeypot for hackers. We do not know what kind of internal controls exists to limit any internal theft especially if their holdings start running into the millions.
While it might seem that this post is bashing masternode pools, I must present the risks/rewards. Masternode pools have a role to play in the portfolio of the smart crypto investor, investing in more than one pool can minimise the risk of losing it all in one go. In your quest for crypto passive income using masternode pools, keep in mind that the ROI is important but the fluctuation of the exchange rate of the underlying capital vs BTC/USD is even more critical.
Posted from my blog with SteemPress : http://nodesofvalue.com/investing-in-masternodes-part-3-masternode-pools-and-shared-masternodes/