First of all we are going to begin with a definition:
Masternode it is a knot connected with a network from which transactions are realized, but also in the purpose to create / to receive / to pass on of the information through a communication channel through a software connected to the network 24h / 24h and 7j / 7j.
The terminology can a little vary according to the project in whom(which) they are set up, but the end(purpose) is always the same. (Masternode for PivX / Dash, Securenode for ZEN, Znodes for Zcoin, Oracles for Wagerr, Tron Masternodes for Crown)
They can serve to make specific tasks such as the immediate sending, the mixture of rooms(parts,plays) to support the confidentiality, help to stabilize the network.
In return, the users setting up Masternodes receive bonuses in the form of paid rewards, dividends in the form of crypto currency on a periodic base.
Masternodes is knots complete as in the network Bitcoin with the exception of the fact that they have to supply a level of service to the network and that they have an obligation of pledge to participate.
The pledge is never lost and is under cover so much that Masternode is in functioning.
It allows the investors to participate in the network, to gain an interest on their investment and to reduce the volatility of the currency.
Given that the program of reward of Masternode has a fixed percentage and given that the network of Masternodes is fluctuating, rewards her for Masternodes will vary according to the number of active Masternodes.
Masternodes can be used to offer additional services according to the project and to the asset that can represent Masternodes on the network.
Finally, Masternodes can, if the feature is implanted, to receive voting rights on the proposals of actions in the network.
Which allows to create a governance in the management of the proposals and the funds of development.
Knowing that all the projects do not implant the same capacities in their Masternodes.
Some choose to limit capacities to those of the technical vote (hard fork, soft fork) and does not absolutely set up a budget management, nor even a specific remuneration for finance the development of the project.
Indeed this one has to result from a dedicated remuneration and from a complex budgetary management system to be implemented. Besides, in certain projects, Masternodes is there only to create a more solid skeleton of the network contrary to the system of simple Proof of Stake and have in itself no other specific capacity.
DASH is today the crypto exchanges the most evolved in the implementation of this governance system and budgetary allowance decentralized by the intervention of Masternodes.
Today many projects are inspired by DASH to build at first a skeleton of Masternodes by copying the code, then secondly wish to implant a governance system as DASH with objectives which can vary according to the projects.
You can find here a former one but a very good article on the governance of DASH: https://dashfrance.com/articles-de-fond/le-tres or-de-dash-un-systeme-unique-de-gouvern ance-decentralisee
You will find here the platform of the budgetary system of DASH: https://www.dashcentral.org
Another example interesting to discover is Monetary Unit and its platform in the course of finalization http://mymue.com
Even if I am not a supporter of their politics of Masternodes, because the number raised to have one, contributes to the centralization of the network.
One has to note, that the project benefits from an original and innovative development with a governance and a budget management which begins to take shape.
Masternode, decentralization and governance:
Thus Masternodes represents a tool interesting in arrangement of the projects but you should not forget the importance of the effect of centralization to which it can bring whether it is in term of governance or network.
Naturally, the complementarity is made as well according to the system chosen beside Masternodes but whether it is of Proof of Stake or Proof of Work, both systems also demonstrated certain gaps today; the safety and the intermittence of knots for THE PÔ and the centralization and the energy consumption for the POW.
Thus the centralization can be also the lapel of this system.
It is thus essential to adjust the pledge necessary for the execution of Masternode in available total Supply.
A number of Masternodes little raised favorites the captation of available Supply and enrichment.
Example of Supply/count of Masternodes: (the 07/08/2017)
DASH:
Supply available: 7 477 532 Dash
Possible maximum number of Masternodes on the network: 4668 (62 % of total Supply)
Current number of Masternodes: 4620
Supply captive (unavailable on the market): 4 620 000 Dash
Knowing that + there is of available Supply, more the number of Masternodes about the network can be raised without decreasing the available DASH for the users and the storekeepers.
DASH fixed a maximum limit of Masternodes, they are the only ones for the moment.
PIVX:
Supply available: 54 003 744 Pivx count current of Masternodes: 2152
Supply captive (unavailable on the market): 21 520 000 Pvix
You will find below a summary table of the quality of the decentralization of the various projects with Masternodes.
Arbitrarily I chose 1000 Masternodes as being the low limit for a well decentralized network. Underneath I consider the not enough decentralized project and above enough decentralized with regard to available Supply of every project.
I tend personally to think that a project is decentralized well above 3000 Masternodes minimum but it seemed to me, at first sight, too severe.
Furthermore, if the project turns then to a system of decentralized governance, participants' significant number favors a better collective expression.
It is necessary to underline as well as in the crypto exchanges DASH, only the owners of Masternodes have the right to speak in the governance.
Yet if we exclude the developers which are often the first contributors of proposals and also certainly owners of Masternodes, there are two stakeholders which have no voice, the minors and the users.
But this model of governance, even if ' it is imperfect, showed the possibility of creating a governance and a management of the financing thanks to the blockchain and marks the starting point of many of the other projects today.
At present, the projects do not set up a system of M asternode for the same reasons, even if it can be also brought to evolve in time.
Here is various options chosen by the projects knowing that some people can emphasize more strongly a particular function of this system:
Safety of the network (can be coupled with a system the PÔ classic or POW).
Decentralized governance that she is very participative and very including or restrictive in the number of participants.
Management of specific funds resulting from the monetary creation of the blockchain. It means that a part of funds must be specifically dedicated to the development
Decentralization of the network of the crypto exchanges by allowing an access facilitated to parametrize Masternodes and so maximize the number of Masternodes on the network.
Stabilization of the price and the limitation of the volatility of the currency which allows so safe to make rise the value of the course by getting Supply available on markets.
If you wish to investigate this domain, I advise you to make searches on all the projects to know their wish of development behind the implementation of their system Masternode.
Investments 2.0:
Masternodes is thus new forms of investments in the projects and which are going to generate passive income for the contribution brought to the network.
A site specialized on the census and the calculation of the ROI: http: // masternodes.pro/
However it is necessary to be very watchful in the investment on Masternodes.
It is highly speculative even today as all the sector of crypto currencies.
Besides, a lot of project dash into the implementation of Masternode, to take advantage of the leverage which it establishes generally in term of marketing and value added on the price.
It is thus necessary to be very careful in the trendy effect of which try to take advantage many projects in crypto currencies.
Furthermore there is some more of uncertainty on the projects, and it is difficult today to know those who will still be there in a few years and even a few months. That is why he is difficult
It means that the more the inflation rate decreases, the less the remunerations will be important for Masternodes, Stakers or minors.
The rewards of blocks correspond to the monetary creation thus in the monetary inflation of the crypto exchange studied.
However, in a long-term vision, the drying out of the monetary creation by a strong progressive reduction in its inflation has to contribute within the framework of a solid and long-lasting project to the inflation of the price by phenomenon of rarity.
Thus the inflation is a parameter to take account in the analysis of the profitability of Masternodes and in its investment, and it for all the crypto currencies, not simply for those implementing Masternodes.
Technical implementation:
The technical implementation of Masternodes asks for some knowledge in computing, but does not establish, however, an insuperable obstacle for every person having opportunities with the new technologies.
The generic stages are generally the following ones: 1. Download Wallet then synchronize him.
I am not going to make explanatory more specific and I advise you to look for every project if there is a guide and an available and welcoming community before throwing you.
Here are some links where you will find examples of guides: https://dashpay.atlassian.net/wiki/pages/viewpa ge.action? PageId=105900076 https://pivxmasternode.org/2017/03/14/raspberry -pi-masternode-setup/http://bitsend.info/forums/index.php? Topic=7.0 https://txproject.io/how-to-install-a-transferc oin-tx-masternode-on-a-vps-with-fast-sc ript/https://drive.google.com/file/d/0BzEc_iVKIrSOSn A5WXYxSThDRms/view http://www.chaincoin.org/how-to-setup-masterno
Here is I hope that this article will have been you useful to understand better the specific universe of Masternodes and will have given you some keys of analysis in the choices of investment according to the various possible projects.
If you like and wish to support me in my approach, do not hesitate to donate me at my following addresses:
Bitcoin: 1MBdoQ3do6wgau6R2tbRnj37Nn74cmNjh4
Ethereum: 0xB54ADe52bccFc978121935bD83fCF4f96C626DCB
Litecoin: LRdU6osSUnwtEEEn9D2gaxKzxAkoYKwnq7
Dash: XrsYa43Na3HiPSdWvPUjZvDYDxJ8rTs5AS
Ethereum Classic: 0x9DC114768110fE0078bE6a0A98ac1f3bb1a06f40
