update 19 August 2021

Beginner’s Guide to Staking and Masternode Platforms

With the advent of Proof-of-Stake currencies, a lot of connected services have started to emerge. Innovation in the Proof-of-Stake consensus algorithm leads to an increase in the number of platforms that help the average investor, developers, and enthusiasts make the most out of their crypto investments without the hassles of complexity and technical difficulties.

Staking Services

Staking Pools

A Staking Pool is formed when several coin holders merge their resources to increase the chances of validating blocks and receiving rewards. They combine their staking power and share the eventual block rewards proportionally to their individual contributions.

Choosing a Staking pool to stake and get rewarded collectively is a reliable way to make regular, reliable profits. Staking pools can help you generate income without doing much work individually, as all responsibilities can either be distributed or delegated. MyCointainer and StackofStake are two of the better-known Staking pools currently operational on the market.

Cold Staking

Cold staking means that you can start staking cryptocurrencies but hold them on a secure wallet that is not connected to the internet at all times, i.e., a hardware wallet. Cold Staking is much easier and more secure than regular staking. Networks that support cold staking allow users to stake while securely holding their funds offline. However, if the stakeholder moves the coins out of the cold storage, they will stop receiving rewards. This method is handy in allowing large stakeholders to ensure maximum protection of their funds while still supporting the network.

As of January 2020, there are only a handful of projects that support cold-staking. Some of them are

Resources for Staking Services

Following are some of the resources that an Investor might use to settle on a Staking platform and start generating returns

Masternode Services

Another addition to Proof of Stake is the introduction of Masternodes. Masternodes act as different types of users in PoS networks. A Masternode has added responsibilities when compared with a regular Staker. Projects that support Masternode staking, such as DIVI, PIVX, Dash, etc., place extra responsibilities on their masternodes. They are assigned tasks such as voting, delegation, decision making, and so on. It is obvious that with the increased responsibilities, Masternodes are generally paid more than regular stakers.

Shared and Instant Masternode

Most Masternode projects have a barrier for entry, i.e., a minimum stake, to set up. For example, The Dash network asks for a minimum of 1000 Dash as a stake to successfully become a part of the Dash Masternode network. Investors are almost always interested in setting up a masternode but fall short of the minimum requirement due to liquidity issues, risk, or other factors.

A Shared Masternode is a service that connects several interested persons to invest in setting up a masternode cumulatively. Two or more people can come together and contribute to setting up the masternode. This is an obvious advantage for several reasons as it distributes the risk and responsibilities. Someone with full collateral that does not want to risk their entire amount can choose to power a shared Masternode to mitigate their risk.

MyCointainer, Mark Mining Services, 2masternode are just a few service providers that automatically connect users who fall short of the minimum stake requirements. The service automatically configures the server, downloads it. It synchronizes the blockchain and pays out the rewards entitled to the masternode for its work to all masternode co-owners, depending on their invested assets percentage.

Decentralized Masternode

Btc
Bitcoin
$47.272
price
1.1297%
price change
BUY NOW

Being in a market that values privacy and direct ownership above anything else, a Decentralized Masternode Service is the answer to risky Centralized ones. A Decentralized Masternode, such as Flitsnode, is a service that invites users to stake their crypto holdings to set up a masternode and yet retain their full ownership of their funds. In essence, Flitsnode invests masternodes trustworthy by giving back full ownership of funds to its users through its decentralized staking application. Investors use their own wallets to set up a node without depending on any third party or custodian. Decentralized Masternode can be considered as a direct descendent of Cold Staking services.

Resources for Masternode Services

Things to Keep in Mind Before Choosing a Platform

  • Always ensure that you do sufficient market research before settling on a staking or Masternode platform.
  • If it is not cold staking or decentralized, ensure that you have a dedicated computer to carry out your staking activities. The computer should be connected to the Internet and electricity at all times.
  • Disconnecting the device will temporarily remove you from the network and decrease your ultimate reward.
  • It is recommended to join Staking pools as they carry a greater chance of winning the network reward.
  • Delegate staking rights to pools that have a good track record of making the best decisions for the network
  • Consult platforms like CoinMarketCap, Masternodes. Online and other information arbitrators that provide detailed information regarding each project. As explained earlier, choosing a reliable network to stake on is the most important part of staking.

More posts

What Are Crypto Validators and How do They Work?

Validators are new "payment processors" in decentralized networks, and as such, they produce blockchain rewards. It sounds simple, doesn’t it? However, the definition of validators in crypto is much more complex than that. Also, the role of a validator may change depending on the consensus mechanism that each blockchain uses. In this guide to validators in blockchain, we take a closer look at this entity and its indispensable role. Furthermore, we analyze four validator use cases in different blockchains and…

How Many ETH Will Burn After the London Fork?

Since its launch in July 2015, Ethereum has grown exponentially to be the second leading cryptocurrency in market value after Bitcoin. The platform’s growth has primarily been attributed to its smart contract feature, which powers the deployment of a wide range of applications, including oracles, decentralized finance (DeFi), decentralized exchanges (DApps), marketplaces, crypto-collectibles (NFTs), and developer tools.  Despite its growth, Ethereum faces numerous challenges that hinder its usability. The scalability challenge is one of the biggest ones that Ethereum faces. The current state…

The Impact of Adoption of Cryptocurrencies on E-commerce Business

E-commerce is the short form of electronic commerce. It is the buying and selling of merchandise over the internet networks. It also involves the transfer of funds and the keeping of records to certify the transactions made. E-commerce is of three types; business-to-consumer (B2C), business-to-business (B2B), and business-to-government (B2G). The main reason for using cryptocurrencies in e-commerce is to get rid of third parties that control the transactions. This relationship can make online shopping much easier and safer since blockchain technology that backs up cryptocurrencies is…

What it Means to Make Bitcoin a Legal Tender

June 9, 2021, marks the first move that would make history in Bitcoin's timeline. El Salvador passed a bill where 62 of 84 congressional voters would make Bitcoin a legal tender. Fast forward to September 7, and El Salvador became the first country to make Bitcoin a legal tender. In this article, we shall look into what it means for Bitcoin to be a legal tender in detail; What is Legal Tender? "This note is legal tender for all debts, public and…

The Correlation Between Blockchain Activity and Transaction Fees

Miners and validators are essential cogs in any crypto project. They're the ones who process transactions on a blockchain (BC) activity. For their efforts, crypto projects compensate them for their efforts from transaction fees. A transaction is only valid when it has undergone validation. The process ends in the validators adding it to the BC. Mining consumes a lot of computing power. As such, it's an energy-intensive exercise. The motivation for the miners is the block reward that consists of…

Understanding Shrimpy’s New DEX Trading Feature

DEX trading is one of crypto's newest but also most complex investment options as of late. Decentralized exchanges are trustless peer-to-peer (P2P) trading environments relying on smart contracts that help facilitate crypto exchanges. The clear benefits of DEX trading are security, anonymity, and greater user control. Although decentralized exchanges, and DeFi as a whole, have gained immense popularity over the past two years, the segment is still considered new by many in the community. A large chunk of crypto investors still does not feel…

Why Do Exchanges Freeze User’s Crypto Funds?

cryPicture this: you've finally mustered the courage to take the plunge into crypto. Everything is going right for you. You're mastering the hacks to optimize your investment and are looking forward to a fulfilling experience within the space. Then it happens. You log in to your account and find that you can't access it anymore, let alone transact in it. In a panic, you try customer support to no avail. Next, you can't help asking how you got here. Is it…

Determining the Initial Value of Cryptocurrencies

It is quite obvious that the total market cap of cryptocurrencies has enjoyed impressive growth since their inception. It was able to hit the magic $2trn figure, standing at $2.064trn as at the time of writing. That is close to 2.5 times the value of crypto at the start of this year, 2021, as per coinmarketcap data. While all these huge figures are truly impressive, things haven't been like that. The increased market capitalization has been more of a result…

Factors Driving the Price of a Crypto Project to Skyrocket

Cryptocurrencies continue to showcase outstanding crypto performance since the launch of Bitcoin in 2009. Global investors are looking forward to establishing financial stability with digital assets. Due to the growing interest, crypto prices are making a drastic shift to the top.  Still, in some scenarios, the market trend keeps decreasing for specific periods. A coin's bearish momentum creates fear and panic for users who believe in the future of the asset.  The opposite is a bullish market that records skyrocketing prices of…

Vivid Indicators of a Bull Run in the Crypto Market (Bull Market)

In the cryptocurrency space, a bull market is one whereby the prices are expected to rise significantly or are rising. Due to the volatile nature of crypto, the term “bull market” is reserved for more extended periods characterized by the rise of a large portion of the prices. To be categorized as a rise, the price must be up 20% after two declines of 20% each. There is optimism, expectations of solid results, and investor confidence in a bull market,…