By the way, what are masternodes? The simple explanation!

Masternodes mean something to you, right? How to miss it when many crypto-holders declare that they earn passive income thanks to this method.

After all, ZoneBitcoin is a blog that wants to help you generate passive income with cryptocurrencies. It was therefore time to focus on the concept and reality of Masternodes.

Here is a first explanatory article which explains what a Masternode is and how it works.

(There are other articles on the blog that tell you how to set up a masternode and which masternodes are the most profitable)

What is a MasterNode?

As you know, all Cryptocurrencies work with a validation system for each transaction. Indeed, this is the very principle of the blockchain. The blockchain ultimately being all the validations of each transaction.

Until then, you follow me right?

Alright. Also, you should know that this type of validation is given via two methods.

Some blockchains use PoW called Proof of Work (used on Ethereum also) or Proof of Work in French. As the name suggests, PoW is carried out through the labor of miners. Miners achieve proof of work by mining on the blockchain. This is typically the case for the Bitcoin blockchain. Transactions are validated by Proof of Work from bitcoin miners.

Alongside PoW, there is another type of validation. This is what we call PoS, Proof of Stake or Proof of Stake in French. It is this last type of validation which takes place via a system called….the MasterNode!

If you understand the difference between PoW and PoS, you already understand a lot about cryptocurrencies, blockchain and MasteNode! But, this is only the beginning!

The concrete case of a MasterNode

A masternode is a large node linked to a network from which multiple operations and the transfer of information pass via a communication channel connected to a non-stop network.

This is a simplified definition of what a MasterNode is.

Now, we can move on to the pure definition of a MasterNode. In English, it means "master node" or "major node". The term node in the computer lexicon is a machine that is an integral part of a network. It is through this network that operations and communications are done. Thus, MasterNodes are a special kind of node. But because they are Master, they are then more important than the others.

It is as if the MasterNode had several other nodes under its control that depend on it. This is where its importance comes from.

To make this better understood, imagine a cryptocurrency in concept. In order for it to exist and for exchange operations to be validated, it needs several networks (several nodes). For the different nodes to function correctly, it is necessary to oversee MasterNodes which will be in charge of the proper functioning of the other nodes.

Thus, a MasterNode contains a full node with a total copy of any blockchain. While the nodes below it only have a partial copy.

Is that more understandable?

Don't worry, you will quickly become familiar with this concept as you learn about the world of cryptocurrencies.

Remember that each time there is a PoS verification as is the case with the crypto-asset Decred, there is a MasterNode.

How to make money with MasterNode?

If we are so interested in masternodes, it's because they allow us to make money. Yes, it is still a method of making money as is investment in ICO, For example. Yes, maybe you even came across this article for this very reason. (Don’t hesitate to subscribe to our newsletter to obtain the free guide: Make money with cryptocurrencies).

How does it work? You simply “store” a quantity of tokens of a crypto-asset that uses PoS. As simple as that.

So when you have your MasterNode, other people will be able to use it to validate transactions. This is how you will make money. Thanks to the commissions generated by the validation of transactions. The commissions will be shared by all the people who participated in the validation of the transactions

People will route their transactions through your MasterNode and it is your structure which will validate these transactions. You will then earn commissions, which will be shared with the people who contributed to the validation of the transactions. In other words, you are rewarded for storing tokens and therefore helping to stabilize the cryptocurrency. It is a reward system close to Airdrop in the idea.

This is why it is often said that MasterNodes are the royal road to passive income. Because apart from investing a certain amount and setting up the MasterNode, you don't do anything else. Nothing other than cashing in your winnings.

In addition, you can also double gain if the token you have chosen increases in value over time. It is therefore a double gain: the commissions + the multiple of the value that your cryptocurrency has taken.

Is it easy to configure a MasterNode?

This is the question that can be annoying. If it were that easy, everyone would do it, right? In fact, rest assured, it's still very simple toinstall a MasterNode.

The first thing to have though is the minimum amount of tokens. The more recognized the project is, the more the MasterNode will cost and potentially the more it will bring in.

In addition, you also need good equipment and a good internet connection. Yes, a bit like bitcoin mining but more simplified.

Don't forget that Masternodes can also be used for additional services. This will depend on the project in question.

In my case and for many other people, we go through MasterNode providers. We will provide you with detailed articles on these suppliers and those we prefer. You can also opt for the shared masternodes, which will allow you to reduce costs.

😛 Also, here it is, to finish a good site to be able to make your masternodes in a simple way and at a lower cost, it is about Allnodes.com.

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Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

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