By The Masternode dispute is significant, as the contestants are a number of cryptocurrencies. Masternodes refer to computers which are stacked with tokens, that are connected to a network. The computers are performing work in addition to simply supporting the software that governs a given cryptocurrency.
Brain Colwell, a blogger, and consultant to crypto start-ups are facilitating debate and encouraging hype. He designed a contest which puts pairs of tokens that use masternodes against each other.
The tournament called “#MasternodeMeBro18“, is being hosted from 3 July – 28 October. It is designed to identify which of the 64 projects can best rally their community. The third round had 16 tokens paired off against each other and brought in a total of 11,416 votes.
The tournament escalated to the extent that there was evidence of vote tampering. Colwell’s partner, OmniAnalytics, detected multiple votes from some IP addresses, so they had to re-run the impacted battles. The fourth round of the contest started on August 28.
Masternodes allows participants in the network to earn an income in addition to token appreciation. Colwell told CoinDesk:
“I have always been interested in communities with an interest in yield. You’ve got to find a way to make money all the time.”
Like bitcoin’s old days
Dash, formerly “Darkcoin”, requires masternodes in order to run its privacy-enhancing features. By staking some tokens and making a computer available to the network, users with a long view of Dash earn an income on their stake, in the form of fresh tokens.
The majority of token-based start-ups that have a masternode feature rank in the small- to mid-market capitalization ranges. Dash is an outlier, with a $1.3 billion market cap.
Pricing what node to master
Kalla advised that buyers should make sure that they will earn more than it will cost them to run the computations required. He reported that “the rewards should also exceed the inflation rate”.
Masternodes.Online is a website that makes it easy to see what the upfront costs and returns are. Masternodes typically have high rewards. A reasonable starting price to buy a stake of tokens to run a masternode ranges from $2,500 to $5,000 in tokens.
Other kinds of income
Swarm Fund, the Techstars alum, raised $5.5 million in an ICO and launched a masternode programme. According to the company, 9 percent of the token supply has been staked by interested masternodes. The theory is that returns on managing consensus will be higher early on and the investments will pay off later, giving participants an incentive to get in early and stick around.
Swarm’s CEO, told the CoinDesk that “in contrast to other rewards systems, our masternode system actually increases rewards over a long period of time”.
Signals and incentives
Money makes masternodes an enticing idea for masternode projects. A new start-up called Kalkulus has secured stakes for projects that perform well in the tournament.
If a user holds a stake in a particular token, Kalkulus will run the computations so that the user won’t have to run the masternode computations.
The company committed to provide the service to four projects with the most votes in the third round. Companies like Kalkulus need signals to help them decide which tokens to provide the service for.
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