What Is a Masternode?
Cryptocurrencies run on a network of computers, each keeping a digital record of the data (the blockchain). A computer, phone, or any computing device that can send, receive, or participate in the blockchain is a node of the network. In a variety of cryptocurrency networks, a masternode is a node that governs other nodes. Unlike regular nodes, masternodes do not add new transaction blocks to the blockchain — they verify new blocks and perform specialized tasks for the blockchain. Operating a masternode requires a significant financial investment and operating costs. Most cryptocurrencies require masternode operators to provide collateral (or a “Proof of Stake”).
Are Masternodes Helpful?
Full nodes keep a cryptocurrency functioning. Each full node contains an entire copy of the blockchain’s history of transactions and submits new blocks of transactions for verification by other nodes. For each new block of transactions submitted, the other nodes (including masternodes) must verify the transactions before they are added to the permanent ledger. Masternodes, however, typically don’t submit transactions for verification —- they only verify for other modes. They create efficiencies, and as such, are incentivized.
Cryptocurrencies that employ masternodes have grown in popularity because masternode operators can earn rewards even if the value of the coin isn’t rising.
Top 10 Cryptocurrencies That Use Masternodes
1. Dash [DASH]
Dash is digital cash. Payments are instant, easy, and secure, with minimal fees. Dash has been associated with the concept of masternodes since the invention of this concept in 2014. Masternodes host full copies of the blockchain and provide a unique second layer of services to the network, facilitating advanced functions such as InstantSend, CoinJoin, and usernames on the blockchain. Over 4,500 masternodes support the Dash blockchain, processing about 30,000 transactions per day.
Zaimirai specializes in Dash masternode hosting.
2. Horizen [ZEN]
Horizen uses a multi-tiered node system, with almost 50,000 active Horizen nodes today. Regular Full Nodes, which are not incentivized, hold an up to date copy of the blockchain. Horizen’s Secure Nodes enable security & resilience of the network with enhanced point-to-point encryption and decentralization. Super Nodes enable a sidechain platform for unlimited blockchains and dapps. They allow tracking and payment of Secure Nodes to be moved on-chain or in protocol.
3. Flux [FLUX]
Fluxnodes come in three tiers (Cumulus|Nimbus|Stratus), each providing computing & storage power for the Flux network. In addition to processing transactions, Fluxnodes support Flux dapp backends, smart contracts, and sidechains for asset layers.
4. Syscoin [SYS]
Syscoin offers fast, low-cost tokens, assets, and (fractional) NFTs. Syscoin’s incentivized full nodes provide a high-throughput relay network for Syscoin’s Z-DAG protocol and a service layer for future capabilities and features. 75% of each regular block reward is distributed to masternode operators. In addition, Syscoin offers a seniority benefit, a 35% bonus to their base reward after one year and a 100% bonus after 2.5 years if the collateral for an active masternode is stored at the same address for the entire period. At present, about 2,700 independent full nodes power Syscoin.
5. Beldex [BDX]
Beldex is a privacy-enabled cryptocurrency. The transactions can range from traceable publically available and traceable transactions to untraceable private transactions. Beldex masternodes are full nodes that store a copy of the blockchain, validate transactions, and secure the network. BDX is a low satoshi masternode crypto so it has a low lock-in or entry threshold for masternodes. Under 200 masternodes support Beldex today. Masternode operators must hold the required amount of 10,000 BDX as collateral.
6. Divi [DIVI]
Divi’s “Smart Wallet” and blockchain make transactions speedier, affordable, easier, safe to use, and less prone to user errors. Divi uses five price tiers (with scaling rewards) for nodes: Copper (100,000 coins), Silver (300,000 coins), Gold (1,000,000 coins), Platinum (3),000,000 coins), and Diamond (10,000,000 coins). The chance of earning rewards at each masternode level improves linearly, incentivizing users to hold or purchase more DIVI to reach the next level. There are currently around 2,000 nodes across the range (pyramid) of tiers.
7. Firo [FIRO]
Firo – formerly known as Zcoin, is a privacy-focused cryptocurrency that deploys zero-knowledge proofs to ensure fully anonymous transactions. Firo masternodes host Firo’s infrastructure and provide services like 51% mining attack protection and instant send, earning 35% of the block reward. Masternodes require collateral of 1000 FIRO to ensure masternode holders have a stake in the coin and are incentivized to keep it up-to-date, reliable, and working honestly. There are currently almost 4,000 nodes.
8. PAC Protocol [PAC]
PAC Protocol is built on a new blockchain technology utilizing both proof-of-stake and deterministic masternodes to offer instant, secure and low-cost transfers. PAC Protocol offers a powerful & secure masternode networks that enables frictionless transactions worldwide. PAC masternode owners stake 500,000 PAC to run a node.
9. Energi [NRG]
Energi is a proof-of-stake (PoS) cryptocurrency that combines smart contracts, decentralized governance, and a self-funding treasury. Energi uses an Ethereum-based code-base and has adopted all of Ethereum’s existing capabilities. With a dual-layer architecture, Energi is designed to handle tens of thousands of transactions per second, while retaining high decentralization. Block rewards are 10% to the Stakers (PoS), 10% to the Energi Backbone, 40% to Masternodes. and 40% to the Treasury. Masternode holders must stake 1,000 NRG (minimum collateral), with the ability to increment collateral up to 100,000 NRG per instance.
10. PIVX [PIVX]
PIVX is a User Data Protection oriented blockchain project and cryptocurrency. PIVX masternodes provide additional nodes to validate blocks and transactions, adding distributed security to the network. About 1,800 masternodes power PIVX today. The Proof of Stake is 10,000 PIV per node, with an estimated 8.97% annual reward.
Other Cryptocurrencies That Use Masternodes
11. Oxen [OXEN]
12. Stakenet [XSN]
13. Enecuum [ENQ]
14. AXEL [AXEL]
15. SmartCash [SMART]
16. Diamond [DMD]
17. Stakecube [SCC]
18. ANY Blocknet [ABLOCK]
19. Blocknet [BLOCK]
20. Etho Protocol [ETHO]