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Understanding Master Nodes: A Lucrative Investment Option to Decode

People contribute to cryptocurrencies to make a fortune and yet are unaware about the Master Nodes. Indeed, if you crack the science behind Master Nodes, you simply unlock your chance to make income when you are asleep.

Cryptosphere is a vibrant and diverse space that extends a variety of tools to take full benefit of the opportunity. What makes it even better is that the users/ contributors have all the rights to try and utilize the potential of any such tools and adjust the risk and gain profile. One such amazingly lucrative tool is Master Nodes that lets you earn the desired profit both: actively and passively.

Sadly, most of the novice investors, who are yet busy dealing with the smooth nodes, find the word Master Nodes completely alien. In this article, we will discuss every aspect of Master Nodes hoping that by the end of this article, you will have enough understanding of Master Nodes to enter and exploit the world of cryptocurrency.

What are Master Nodes?

nodes live map

image credit – © bitnodes.earn.com
Master Nodes, alternatively known as bonded validator system, are a group of servers that support the Blockchain’s network. These nodes are specialised in performing and promoting some unique services that in general, are out of reach for under proof miners.

To just put it empirically, Master Nodes are peer to cryptocurrency wallet that comprise a complete Blockchain in a functional state. Just like many of us have Bitcoin nodes that are always functional and changing. However, Master Nodes are different than nodes regarding functionality. Besides performing the essential function of keeping the entire Blockchain and its running blocks or transaction, Master Nodes perform many other services.

Functions exclusively performed by Master Nodes:

  • Boosting the privacy of transactions
  • Increasing the speed of the transaction/ Instant transactions
  • Participating in critical tasks such as voting, governance and more
  • Assisting budgetary and treasury related systems in the Cryptosphere

Additionally, MasterNodes are a standalone entity, but they work in a network wherein several other similar nodes are connected with one another making a decentralised system. These nodes, in short, are referred as ‘MN’.

The Inception of Master Nodes

DASH first used Master Nodes in its cryptocurrency network. Dash has two different tiers of systems- one primary system of miners trying to achieve the Blockchain consensus and the secondary network of Master Nodes. Dash claim this intertwined network as the proof of service algorithm and thus, boasts highly maintained Dash’s system.

So, technically, Master Nodes is the child of Dash, but with its success, it is adopted by many different cryptocurrencies. Initially, a technology to support instant and anonymous transactions, Master Nodes today find its application in a variety of jobs and industries.

How do Master Nodes work?

The primary responsibility of MasterNodes is to stake a percentage of any currency in the entire network. Anyone willing to create or buy Master Nodes, referred as e-money must take the stake of the part of it to get the value back.

For example, if you are planning to buy Master Node for Dash, which is worth 1,000 Dash, you need to shell out around $763,000. Once you have purchased these much currencies, you can establish a Master Node for Dash and start putting the desired percentage at stake for others to bid and buy. To create the Master Node, you have to first download the core wallet of the respective currency, in this case, Dash core wallet. Once you have the portfolio installed, your computer will start working as a Master Node and gets connected to the other Master Nodes supporting the Blockchain. You can do this all on your own, or hire a third-party expert for the same.

The guidelines for maintaining a Master Node are different from currency to currency, and so are its functions. In case, you fail to fulfil these requirements or the money has stopped rolling, the Master Node stands frozen.

45% of the Blockchain rewards earned by Master Nodes goes to the miners and another 10% to the Blockchains treasury funds. For this 10% percent, the operators’ combined vote and decide the best use to enhance and improve the network.

Why Should Crypto Coin Investors Invest in Master Nodes?

If you are looking to earn some extra incentives, Master Nodes are a deal to invest (provided you have sufficient funds). It is similar to receiving interest on your cryptocurrency holdings.

Usually, 45% of the Blockchain rewards earned by Master Nodes goes to the miners and another 10 % to the respective Blockchains treasury funds. For this 10% percent, the operators’ combined vote and decide the best use to enhance and improve the network.

The incentive model is different for different cryptocurrencies, but in all cases, a handsome passive income is guaranteed.

If you have invested in cryptocurrency, you must look forward to spending on Master Nodes. However, before you do so, analyse the ROI. Several cryptocurrencies in the market allow investments in, but not all of them are worth investing because of limited incentives.

Some Benefits of Master Nodes

Just like conventional Proof-of-stake algorithms, Master Nodes safeguard the Blockchain from any network attack. As they are highly expensive, the feature contributes to maintaining the decentralised ability of the system. Because the price is high, very few people have the knowledge and power to manage more than one node at a time.

The incentives are also uniform, and unlike bitcoin Blockchain function, wherein, an investor is paid to shift from one Blockchain to another, here the incentives depend upon how well you maintain a Master Node. As long as you want to get ROI on your initial investment, you have to play by the Blockchain’s rule, and thus its integrity is maintained to the highest level.

Existing Master Nodes Based Cryptocurrency Model & Different Coins

Master Nodes were first used by DASH for a range of services as discussed below:

  • InstaSend: The Master Nodes were responsible for facilitating instantaneous transactions.
  • PrivateSend: The Master Node made sure users were allowed to send and receive secret payments.
  • Decentralized Governance: Adjudication power, as well as voting rights for technological & financial developments of the Blockchains are held by the Master Nodes.
  • From here, developers took ideas from the Dash’s model and developed their unique crypto spheres.

Also read: How Cryptocurrencies Work?

Different uses of Master Nodes in different Cryptocurrency Networks

Once the primary motive of Master Nodes was clear and proven to the world, the developers found out their own new and intuitive ways to implement the technology. Some of the successful and established uses of Master Nodes in different cryptocurrency model include:


Privacy coins have used Master Nodes to improve and enhance the anonymity offered in transactions and crossed the bar set by Dash. PIVX, a currency based on similar technology and also a fork of Dash is today renowned for providing the highest degree of anonymity to users by letting them work in incognito mode.

PIVX operates on its personalised version of Zerocoin protocol, which is also being used by other privacy coins like Zcoin. If you are dealing with PIVX, you can quickly change your PIVX coins to zPIV Tokens. By doing this, users get the power to execute any transaction without disclosing their identity as, the transaction identifier is not linked to the user identity. The deal is highly anonymous yet authentic to the highest degree and facilitated through PIVX MasterNodes.


In future, Crypto assets like Block Net and Exscudo are planning to use Master Nodes to support the decentralised model for transfers. In these exchanges, Master Nodes are responsible for regulating the transactions and cryptocurrency trading and extending swift currency gateways. These exchanges will develop and thrive over time.

Commerce and Marketplace

Syscoin is currently utilising Master Nodes model to run its decentralised market. It allows users to access the commerce sites just like eBay. The Master Nodes facilitate instant payments, while maintaining the highest level of anonymity in the marketplace. The Syscoin marketplace is accessible on the core wallet of the currency.

Smart Contracts

BOScoin has utilised Master Nodes for its hassle-free contracts and has employed the facility to run its congress network. The base of the model is Dash’s voting mechanism based on Master Nodes. The developers at BOScoin have worked on the Master Nodes and made a Congress Network that can improvise the governance and boost the decision-making ability. The power of code and policy modification, as well as the decision of allocation of revenue made by Blockchain, lies in the hands of the users through voting privileges.

The Upcoming Future of Master Nodes

Master Nodes hold a high potential to reap, and cryptocurrencies around are finding out ways to exploit it to the fullest. Besides a lucrative investment opportunity, it is also a chance to improve some processes across different industries.

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