Masternode Starting Guide

Masternode starting guide

How to earn passive income by staking cryptocurrencies

What is a Masternode?

Masternodes (MN) are a way for you to create a passive income with your cryptocurrencies. The good thing is that everyone can host a Masternode, but not all cryptocurrencies have support for them. The cryptocurrency Dash pioneered the Masternode system, also known as Proof-of-service (PoSe) within their two-tier network.

By placing your cryptocurrencies as collateral, you can gain access to a Masternode, the required amount of cryptocurrency for one MN varies between the different Masternode projects. You will lose access to your MN if you move or sell any of the staked funds. The Masternodes are used on the network for functions that regular nodes can’t fulfill (e.g. rejecting improperly formed blocks). The service Masternodes provide results in a portion of the block rewards, which is also shared with all the miners on the network.

Where can I find Masternode projects?

Just like there are several websites tracking the current cryptocurrency market cap (e.g. CoinMarketCap), there are similar services out there tracking the Masternode projects. One of the sites, also lists further information of every Masternode to give a quick overview of the different projects and how they compare to each other. They also list the required amount for one MN, how much a MN is worth and how many Masternodes there are on the network. Looking at the top Masternode list (MN’s worth), you can see that they’re not super cheap to buy.

Still you can occasionally find some gems that will offer great ROIs and therefore have lots of price upside potential (see f.e. 'Alqo' below).

Cryptoasset Total Masternodes Required amount MN's worth
(est. Feb'18)
Dash (DASH) 4 698 1 000 $683,000
Blocknet (BLOCK) 406 5 000 $173,000
Diamond (DMD) 138 10 000 $147,000
MonetaryUnit (MUE) 136 500 000 $69,000
Zcoin (XZC) 2 398 1 000 $58,000
PIVX (PIVX) 2 101 10 000 $55,000
Alqo (ALQO) 1 935 10 000 $7,750

For the people just starting out with cryptocurrencies buying a Dash Masternode might not be ideal, but there are several other options to choose between (in a cheaper price range). Before deciding which Masternode network you want to support, you should always understand what use case that project has and how well they’re approaching it, as well as looking at how their payment structure works. By doing this analysis thoroughly, you can filter out and find the best future ROI (Return On Investment).

I have found a project I like, what now?

Great you have done your in depth analysis and found a project you think will be a profitable pick in the long run. You will then need to accumulate the required amount for one Masternode (the stake), this information should easily be accessible from respectively MN websites. You will also have to decide whether you want to make a 24/7 server out of your computer or use a VPS service. A dedicated IP is needed for each Masternode and enough disk space for the complete sync of the blockchain (also known as the project’s core wallet). We would recommend to always run your masternodes on a VPS server. Check out as they offer servers worldwide for as little as 2,50$ per month.

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Generally a basic understanding of how to operate with Linux is usually a positive asset to have if you want to set up and operate Masternodes. There are several guides out there going into detail of exact steps to take. The step-by-step guides are especially great for the beginners, but they can also be very useful for the more experienced people. You can also use nodemaster script to set up any Masternode, a guide for that can be found here.


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