A Masternode is a node or cryptocurrency wallet with advanced functionality that stores an entire copy of the blockchain. The master node synchronizes with the network online. They are also sometimes called supernodes, acting as servers for the blockchain, processing transactions, receiving rewards in virtual currency for such work.  

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Compared to classic nodes, masternodes have more functionality. As an example, we can point to the Dash network, where nodes have a number of functions.

They help to mix transactions: transfers are split and transferred between masternodes. Thanks to masternodes, transactions in the Dash network are transferred very quickly.

Masternode: Common Functions

Masternodes provide a service of privacy, ensuring that there is no single centralized component. Accordingly, the network cannot be deleted or destroyed completely and is as decentralized as possible.

The Masternode provides a guarantee that each of the transactions will be quickly verified online, as the nodes compete with each other and aim to conduct transactions as quickly as possible.

Masternode participates in the management of the network, it is part of the overall system.

What affects profitability?

Yield (profitability) of a Masternode depends on several factors and can vary several times. For example, the yield of a Dash Masternode is 7%, while the Sapphire Masternode can reach 50%. The yield is affected by the value of the asset, the block reward, the number of masternotes in the network, the time it takes to place the masternode, the taxes that need to be paid. All of the above parameters affect the ultimate profitability.

What characteristics should be taken into consideration before investing in a Masternode

Before you invest in a Masternode, you need to analyze the price movement of the coin over the last 3-4 months.

It is necessary to study the biography of the team, what projects they were working on, how successful they were in the market, etc.

One should check if the project that developed the cryptocurrency has a roadmap, if network updates are taking place.

A good indicator is an active community that promotes the project on specialized forums and platforms. The more mentions in social networks and portals, the higher the popularity of the asset among investors.

In addition, you need to pay attention to the % of income. It should not be too high, because this can indicate that it is a scam project.

Cryptocurrency Masternode should be traded on several leading cryptocurrency exchanges. This is an indicator that the asset has prospects for further growth. Also, the cryptocurrency should have support from well-known wallets.

Popular Masternodes in 2022

The top currencies in the Masternodes category by market capitalization, according to Coingecko, include Dash, Horizen, Syscoin, Flux and Divi.

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Results

In summary, Masternodes keep the network running, and through them, rewards can be earned. When choosing a Masterkind for earning, you should pay attention to a set of parameters to minimize the risk of losing your investment.

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