Over 400 cryptocurrencies use the Masternode protocol, the most famous of which perhaps is Dash. Masternodes are a variation on Proof-of-Stake (PoS) mining. PoS is when a user keeps coins in their wallet, staking them to help secure the network and generate new coins, accruing long-term interest. With Masternodes, a user must stake a large amount of coins and they receive significant profits long term, in exchange for their Masternode helping to run the network.

Dash is the top X11 cryptocurrency and currently ranked 12th overall with a market cap of USD 1.7 billion. Masternodes in Dash help mix coins to increase anonymity of Dash transactions. A user must lock 1,000 Dash into a node, currently worth USD 209,000 and keep it running perpetually.

The reward is currently 6.94% interest per year for doing this with variation. That comes out to nearly 70 Dash per year of interest or USD 14,600. Clearly, Masternodes can be quite profitable and provide an income.

The caveat is the coins must remain locked up, so the operator of the Masternode can lose significant amounts of money in a bear market and the operator can’t use the funds for anything else.

There are other Masternode cryptocurrencies with far lower barriers for entry. Some of the really cheap ones require less than USD 10 and have interest rates of thousands of percentage per year. Dash alternatives have market caps less than USD 100 million but some of the bigger ones can be quite stable and profitable. For example, Zcoin requires a stake of USD 13,000 and generates nearly 20% interest per year. ZenCash allows Masternodes with an investment as low as USD 800 with 39% interest per year.

Essentially, Masternode cryptos can be an overlooked way of generating significant profits, similar to mining but with less work and more predictability. Interest rates vary a bit but can be counted on long term, while mining rewards with Proof-of-Work (PoW) constantly decline long term.


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