The Masternode Ecosystem – A Leading Innovation in Consensus Mechanisms

With the advent of Blockchain technology came all sorts of intricacies and technical aspects that began to be developed, debated, criticized, and implemented. There isn’t a single protocol, feature, or application that checks the list of any participant, and that’s a good sign. Criticisms, most importantly, constructive criticisms, pushed boundaries, stimulated innovation, and brought about progress.

One such niche innovation to consensus mechanisms was the introduction of Masternodes. Masternodes are an added layer on the base layer consensus mechanisms. For instance, Dash is a privacy-based cryptocurrency that makes use of Masternodes. In addition, it is a proof-of-work-based mineable cryptocurrency that, unlike bitcoin, does not give full rewards to the miners and the nodes that validate, secure, and share the blockchain.

What are Masternodes?

A masternode is simply a cryptocurrency full node or computer wallet that keeps the full copy of the blockchain in real-time, just like you have Bitcoin full nodes and is always up & running. But Masternodes are considerably different in their functionality than normal nodes.

In general, nodes keep a copy of the blockchain at any given moment, secure and re-verify the transactions, and share the copy with other nearby nodes. These get no real incentive to do what they do. If someone wants to be a node, they do it because they want to, rather than incentivize it.

But with Masternodes, that is not the case.

On blockchains that use the masternode mechanism, such as Dash, PIVX, Energi, etc., nodes are given as much importance as the miners. The role of miners is to provide computation power to the network and help in verifying and securing the transactions, while the role of a masternode, who cements their position by staking a minimum amount depending upon the blockchain, is to collect and assemble the transactions, hold records of the blockchain, re-verify the transactions, and propagate the information to all the other nodes. This divides the responsibilities and secures the blockchain in two ways. Furthermore, Masternodes can be customized for both Proof-of-stake and Proof-of-Work chains.

Like full nodes in any protocol, Masternodes can be run by anyone interested enough. However, there is usually an entry barrier to ensure that the nodes do not act against the system. The entry barrier is a small stake the person running the node takes upon themselves. It is a small collateralize, consisting of certain units of that particular cryptocurrency, to run a masternode, taken as a guarantee to disincentive the person from acting against the network because he has a vested stake in it.

Due to their inherent inclusion of nodes into the incentive system, Masternodes can also be customized to carry out dozens of other features. Governance, Privacy, Voting, etc., can be carried out through the Masternodes. Thus, they effectively help in running the network.

A Look into Major Masternode Coins

To compare masternode coins, we will take the top 5 cryptocurrencies concerning Market Cap and at least 2 years of market penetration:


  • Consensus Algorithm: X11
  • Number of Masternodes: 4690
  • Minimum Stake: 1,000 Dash
  • Responsibilities of the Masternode: Masternodes are powerful servers backed by collateral held in Dash and are designed to provide advanced services and governance on the blockchain. Masternodes host full copies of the blockchain and provide a unique second layer of services to the network, facilitating advanced functions such as InstantSend, PrivateSend, and usernames on the blockchain.


Consensus Algorithm: Customized Proof-of-stake + zerocoin Proof-of-Stake Hybrid

  • Of Masternodes:1,421
  • Minimum Stake: 10,000 PIVX
  • Responsibilities of the Masternode: Besides the responsibilities of a general masternode, a PIVX masternode must ensure the total privacy of all transactional information flowing through the node. Furthermore, the node must readily participate in the network’s governance decisions and give and make changes, given consensus is achieved first. A system called the decentralized budgeting system, or more called the Treasury, is also held under the purview of the masternode. It makes budgetary decisions for the network, such as marketing allocation, developer incentives, etc.


  • Consensus Algorithm: Proof-of-Stake
  • of master nodes: 529
  • Minimum Stake: 20,000 ETZ
  • Responsibilities of the Masternode: The management structure of the EtherZero Community, backed by masternodes, is designed so that Community members could fully manage both the development of the community and its finances. One of the management tools is ETZVote – a system for making proposals by community members and voting for them. The official websites state that the main motivation for masternodes will be the assessment that the proposals on the forum are beneficial for the growth of the coin price.


  • Consensus Algorithm: Proof-of-Work
  • of`Masternodes: 5,812
  • Minimum Stake: 1,000 XZC
  • Responsibilities of the Masternode: A network based on the principles of the zero coin whitepaper, ZCoin, is another privacy-centric cryptocurrency. It is mineable, has a supply structure similar to bitcoin, and, as an added feature, involves a masternode layer. The Masternodes ensure the privacy of transactions, information, and anonymous voting and governance.


  • Consensus Algorithm: Proof-of-Stake
  • of Masternodes: 970
  • Minimum Stake: 10000

Responsibilities of the Masternode: The Proof of Stake algorithm used by the project uses less than 1% of the electricity that traditional mining does. They have also invented a spectrum of features on the masternode technology that boasts a wide range of applications. Divi is the first project to experiment with the tiered masternode system. This system works on offering higher rewards to those who accumulate more coins for their nodes. The protocol also offers visual on-demand stats, such as the Masternode Map. Masternode Map shows the connection between each node, how they are related, and who they are connected to, among other details. Masternode owners choose their level of commitment to support the network and are paid based on that effort.

Make sure you visit our Staking Pools & Masternodes Page for the best hosting services!

Bitcoin live price
price change

Stats Updated on 04 April 2020 From Masternodes Online

Stay up to date with our latest articles

More posts

What Is CBDC In Crypto?

The cryptocurrency trading revolution exploded more than ten years ago and led to an almost unprecedented economic and financial earthquake. As a result, people are learning to change their approach to payment and investment systems, pushing up the price of many cryptocurrencies. Such a rapid change has not gone unnoticed on the boards of the world's major central banks. In fact, in an increasing number of countries, central banks are working on launching centralized digital currencies, known as CBDC. This…

How Social Leaders on Shrimpy help Investors Maximize Profits from Crypto Trading

The emerging trend of social trading allows millions of investors to interact with their peers and learn from accomplished traders in the crypto market. Every market participant wants to become a profitable crypto trader and maximize earnings from the ongoing crypto boom. Unfortunately, navigating the highly volatile space while grasping the complex learning curve that involves fundamental/technical analysis can be rather daunting. Becoming successful in the crypto market requires time to develop a working strategy that empowers investors to execute…

Decentralized Exchanges 2022: Which is the Best Crypto DEX to Trade on?

Market experts believe that the survival and growth of crypto largely depend on decentralization. The good news is that decentralized exchanges or DEXs have become highly popular, and the crypto market sees this as an opportunity to save the essence of traditional blockchain. Each decentralized exchange platform has the potential to revive and thrive crypto market. Moreover, each new DEX platform comes with its own set of features. There are several methods to use DEXs and make money.  Decentralized exchange…

Top Crypto Exchanges for Beginners in 2022

Investing in crypto is not as complex as most people think. So if you’re curious and optimistic about the rise of crypto, there is no reason to hold back and dive into it. Remember, it is normal for beginner investors to get caught in the cobweb of endless crypto exchanges. As a beginner investor, your objective should focus on the best crypto exchanges to make the right investment decisions. Whether it’s Bitcoin or Ethereum, cryptocurrencies continue to be at the…

Top 10 Cryptocurrencies in January 2022

Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…

The Story Of Bitcoin And Ethereum’s Reversed Blockchains

Decentralization is the primary selling point of the three worlds of Bitcoin, crypto, and the web. There are several reasons for this. Some are related to the increased transactional efficiency that decentralization can provide. Others are related to creating permissionless, censorship-resistant digital networks. The most important is that decentralization weakens any single-point-of-failure, hence bolstering network security. This not only keeps a network as close to unbiased and ‘neutral’ as possible but almost guarantees its immutability. Yet the crypto world hasn’t…

What Are the Best Crypto Prediction Sites?

There are now several websites that provide, besides crypto live prices, some forecasts on the future of the leading cryptocurrencies. However, considering the market’s high volatility and the few analysis tools available to the public for formulating these forecasts, it must monitor these portals carefully. This article will report some of the primary sources of price forecasts in the crypto industry. However, we remind you that the information contained in the text does not constitute financial advice, and we invite…

Why Do the Cryptocurrency Prices Go Down on the Weekends?

If you have been in the crypto world for a while, you will probably have noticed a typical behaviour of the market during weekends. With some exceptions, we are used to seeing the price of significant cryptocurrencies drop over the weekend. The phenomenon is known to those who operate in this market, but understanding precisely the causes seems to be rather complex. Therefore, this article will discuss a definitive answer by analyzing the various main factors involved in this market…

How to Track and Stay Updated with Cryptocurrency News

Cryptocurrency is a young market and, as such, very fast-moving. If we exclude the phenomenon of stablecoins, the prices of cryptocurrencies change continuously, with sometimes very high volatility. Since a volatile investment is, by definition, a risky operation, traders usually look for ways to reduce the possibility of incurring significant money losses. In this context, it is vital to stay up to date with market events, even if this can be complex. As seen in the past, a single tweet…

Keeping Consensus: Explaining Ethereum’s Difficulty Bomb

Ethereum’s difficulty bomb is a tool for maintaining network consensus between all classes of participants. This is a challenging task for Ethereum compared to Bitcoin, which performs frequent backwards-incompatible hard-forks. The most significant of these – Ethereum 2.0 – is yet to come. When it does, the difficulty bomb will be crucial in ensuring the community’s smooth transition to the new protocol. Review: Ethereum 2.0 and Proof Of Stake To understand the necessity of the bomb, we must review some…