Passive cryptocurrency mining on masternodes

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What are Nodes, Full Nodes, and Master Nodes

To make it clearer to you in complex explanations about the operation and functionality of blockchain technology, let’s start with the basics. Thus, it will be easier to understand blockchain technology.

There are two types of downloadable wallets: light and heavy. There are also online wallets that do not need to be downloaded to a computer at all.

In light wallets, you won’t have to download the entire blockchain. You install only basic information, software and wallet settings, including a link to a third-party source – to the blockchain. Since you are downloading a link to a third-party source – blockchain, such wallets are not absolutely safe. A hacker can intercept your access to the link at any time and if you do not use security measures, do not use antivirus, use an unsecured public network, it can infect your computer and intercept your password. But easy wallets can be downloaded to any computer, it is possible to use any Internet, including the public (theoretically, but practically not recommended), they do not take up much space and memory on the computer and they are easy and convenient to use. But light wallets are not completely safe.

There are people who need maximum security. For example, those who store large amounts in wallets. For safety’s sake, they will do anything. Namely, to download a heavy wallet. A heavy wallet contains a complete blockchain. There is no need to access third-party resources, since the entire blockchain is stored on a heavy wallet. And the user of the heavy wallet voluntarily, on his own initiative and absolutely free of charge, becomes the custodian of the public blockchain, its integral part. Instead of storage services, he receives maximum security in the safety of his funds. By and large, it makes sense to upload a wallet with a full blockchain to your computer only if you have large amounts stored there and you have something to lose. However, if you want to upload a heavy wallet with a complete blockchain to your computer, you must fulfill certain requirements. It is necessary that you have powerful equipment, excellent Internet, preferably a dedicated server. After all, a complete blockchain can only pull good equipment. New transactions are constantly appearing on the blockchain and its volume is only growing. Otherwise, your wallet will be synchronized with the blockchain for a long time and it will be very difficult to work on it.
Now let’s move on to the definitions themselves.

Nodes

A node is a thick wallet in a certain cryptocurrency that is not yet fully synchronized with the blockchain.

There are no requirements for such a wallet, but since it is not synchronized with the blockchain, the complete transaction history and all information will not be displayed on it. Such a wallet can be offline.

Full Nodes

In most cryptocurrencies, owners of synchronized full wallets receive nothing for their work on maintaining the network and on storing and maintaining the blockchain. They work enthusiastically. And they load heavy wallets only solely for safety reasons. That is, only those people who initially intend to store large amounts of money in wallets usually use heavy wallets.

A full node is a thick cryptocurrency wallet that is fully synchronized with the blockchain. Such a wallet fully downloads all information about transactions in the blockchain and its volume can be colossal.

Node Master

But money should work and bring other money. And in heavy wallets, they are dead weight. So the decision was made – to pay money to the owners of heavy wallets for the fact that they store money in their wallets and maintain the network, that is, they are the custodians of the blockchain. And also for other services to ensure the maintenance of the functionality and functionality of the blockchain. But money is never paid for nothing. To receive money, owners of thick wallets must fulfill certain conditions. For example, their device must be online 24 hours a day without interruptions, because other users constantly turn to the blockchain. They need free access to the blockchain at any time of the day.

In addition, young cryptocurrencies needed someone to support and maintain their blockchains. To do this for free, only for the sake of ensuring the security of deposits, users would not. It is one thing to store large amounts in a thick wallet in Bitcoin and it is quite another thing to store large amounts in a thick wallet in a little-known cryptocurrency. To constantly keep large amounts in an unknown cryptocurrency, few would dare. And to ensure the blockchain is operational, thick wallets are needed and they must always be online. Therefore, in a number of cryptocurrencies, the Master nodes appeared.

The master node is a thick wallet that is fully synchronized with the blockchain, which is constantly on the network. Masternode owners receive a fee for a wallet under the conditions for performing certain actions to ensure the operability and functioning of the blockchain.

The presence of master nodes is necessary for young cryptocurrencies. Nobody will just by their own initiative download heavy wallets with a full blockchain onto their computers and voluntarily keep such wallets constantly online so that other users always have access to the blockchain at any time convenient for them.

Earnings on the master node

Earnings on the master node is a classic passive earnings, although some efforts in this type of earnings must also be made. On the one hand, earnings on a master node can be compared with a deposit in a bank. I invested money, set up a node (node) and you get passive income. On the other hand, not everything is so simple.

Features of earnings on the master node:

Not all cryptocurrencies use the opportunity to earn money on the master node. Therefore, investors have limited choices;
Basically, master nodes use little-known cryptocurrencies to maintain the health of their blockchain. The owner of the master node must be an experienced investor in order to predict the prospects of a particular cryptocurrency;
Clearly specified requirements are presented to the owners of the master nodes: you need to be a holder of a certain amount of cryptocurrency, download a heavy wallet with a full blockchain to your computer, the computer must be constantly on the network, there must be good Internet and a dedicated line;
Often, in order to be the owner of a master node, you need to keep the cryptocurrency for a certain time, and during this time, the cryptocurrency can both rise in price and fall. Income from the master node may be less than losses from the depreciation of the cryptocurrency;
The owners of the master nodes are not subject to such stringent hardware requirements as miners;
It is easier to configure a master node than mining equipment; it does not require such a large amount of electricity as for mining;
If the cryptocurrency falls, then it can be sold, although in this case you can lose profits from owning a master node if cryptocurrency is required to be stored for a certain amount of time.
As you can see, the owners of master nodes have their advantages over miners. The master node is easier to configure, it does not require expensive equipment, a large expenditure of electricity, production facilities for mining. Mining equipment is more difficult to sell. On the other hand, not all cryptocurrencies use the master node. Although, since all cryptocurrencies are required to contain the blockchain, the number of cryptocurrencies with master nodes is constantly growing, and, therefore, calculation and choice.

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