Masternodes and why they matter to investors.

in #masternode6 years ago

Investors learn to buy something and sell when it's worth increases. A master node rewards HODLers instead.

Running a full node taxes you computers resources because it requires you to continually download the complete blockchain and uses the computers resources to vote toward consensus which requires proof of work. This may seem like a waste of resources and it would be if it was not paying those Masternodes out a reward. With Bitcoin, miners aim to find the NOX to earn a reward, but with Cryptocurrencies who offer a Masternode finding a NOX is not required, Masternodes receive a predetermined payout for holding a minimum amount of their token and run a full node.
The best way I can explain this comparison is by breaking it down to very simple terms. If I buy 10 baseball cards for $10.00 each and after a few years their value increases to $20.00 each that is great, I doubled my investment. Now if I instead invested in a Masternode, buying 10 cards at $10.00 each, not only would my 10 cards value increase over the years, but I would be rewarded for holding those ten cards. If the reward was 1 card per year, then after 2 years my 10 cards would be 12 cards and at $10.00 per card increasing to $20.00 per card my $100.00 investment would now by $240.00 where as a non Masternode would only be worth $200.00. Now these numbers are inferior to actual numbers, people must invest heavily in a currency to have a Masternode and as such are rewarded greatly. Masternodes require such a hefty investment as do dis-incentivize malicious actors, basically to keep people from wanting to double spend or other attacks on the network. The thinking being that if you put up all that money and you get caught trying to cheat the system you can lose all of that money so you are less likely to try to cheat. Now you can also set your Masternode up on a Virtual Machine that you can rent for $5.00 a month that will never lose power, or go offline and will essentially sit there earning you money https://www.digitalocean.com/pricing/. Lets look at some Masternodes, how much they cost to buy in and how much they pay out.

VeChain Thor for the "Strength" Node 1,000,00 VET

image.png
While this looks great it is a very large investment and if VET goes under that is a huge loss.

WORX for a Masternode 1,000 WORX

image.png
This is a much lighter investment and pays out a decent amount. The other thing to consider is compounded interest, unlike VeChain, WORX gives you more of the same token which will add to the total you have thus giving you a higher payout. To do this with VeChain, you would have to sell your Thor power to buy more VeChain Thor in order to have compounded interest. You can buy WORX or other Masternodes here https://masternodes.online/currencies/WORX/.

I am not a financial advisor and this is not financial advise, invest at your own risk.

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@embomb701, you are a real Lecturer when it comes to blockchain, crptocurrencies, '.....'coins' etc and you are careful to say invest at your own risk. I like your wisdom. Thanx for the post.

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