The functioning of a crypto-currency depends on the transaction validation system. Blockchain susing PoW (Proof of Work, or Proof of Work) work thanks to the activity of minors , while those using PoS (Proof of Stake, or Proof of Work) work thanks to a MasterNode system.

There are a few exceptions to this rule, but overall, this is how things work today.

So, What is Masternode?

The term Master Node comes from English and literally means “Master node”, although one can more appropriately translate as “Central node” or even “Main node”. The term node in computing designates a machine which is part of a network and constitutes one of the pillars of said network, through which communications pass . We can there fore say that MasterNodes simply represent a special category of nodes, and that they remain more important than conventional nodes.

We can make the analogy between a team leader and the employees just below him. The team leader will be responsible for carrying out a project by asking his employees to complete certain tasks. He will then present the results obtained to his employer.

To understand the system more easily, here is a comparison between a crypto-currency functioning thanks to a MasterNode system and a classic business structure:

  • The company as a whole represents crypto-currency .
  • The president of the company is the blockchain . It is he who is responsible for running the business by taking the decisions essential to its development and by setting up rules to follow.
  • MasterNodes are team leaders who must carry out a mission in order to be able to move the business forward. Each mission completed correctly will be registered on the blockchain.
  • The employees are the nodes (nodes)which are responsible for carrying out the task requested by their superior. If the work is done correctly, then the MasterNode can transmit the information to the next level.

How does a Master Nodework?

As we have seen previously, crypto-assets operating according to the PoS verification system need Masternodes to be able to function properly.

From a technical point of view, a MasterNodeis a complete node which has a full copy of the blockchain. It performs, validates and transmits transactions over the network. Lower-level nodes only have a partial copy of the blockchain, and take turns checking transactions, using a random selection system.

The main interest of setting up a MasterNodeis the fact that this structure makes it possible to earn money . You just have to block a certain number of tokens / coins of the crypto-asset in question and you will be able to embark on the adventure.

People will process their transactions through your MasterNode and your structure will validate these transactions . You will then earn commissions, which will be shared with the people who contributed to the validation of the transactions.

By doing so, you will automatically gain crypto as sets without any effort, if not the initial effort which is to set up in the system. In addition, if the crypto-currency is interesting, you will also earn money from the valuation of the token over time. You will be a winner on both counts.

However, setting up a MasterNode is not necessarily accessible to everyone. You must have a minimum number of tokens / coins for this to happen. So that means you will have to invest a lot of money if the project is popular. In addition, you need sufficient equipment, a good Internet connection, and time to invest in keeping the equipment in good working order; because Masternodes must be permanently available to ensure the proper functioning of the network. Obviously, it is still possible to use the services of a third-party supplier to rent a server, but it is never free.

In addition, some crypto as sets such as TOMO use a voting system to elect a maximum of 150 MasterNodes operating at the same time. You will there fore also have to be among the lucky ones.

Now let's see how to set up a MasterNode that will generate passive income.

YEP Coin Masternode Installation