For starters, masternodes serve as an alternative to mining cryptocurrencies for many people. A masternode allows you to earn by simply running a full copy of the blockchain on your machine full time. The full copy is downloaded in real time. The basic function of masternodes is to support the network operations and they relay blocks and transactions across the network. But that is just one of the functions of masternodes.
Masternodes also help in the decentralization of the network involved as well as in increasing the privacy of transactions while communicating continuously with other nodes, help in doing instant transactions, and they participate in governance and voting on network's project proposals. Masternodes also enable in budgeting and treasury system in cryptocurrencies. These are the main functions, but masternodes also vary from cryptocurrency to cryptocurrency.
Although anyone in a given cryptocurrency project can run a masternode, most masternodes have an entry barrier, which essentially ensures that the node operator has some stake in the system -- and thus ensures that the person does not engage in malicious activity. For most cryptocurrencies, the operator's holdings are devalued if they cheat or compromises the system. These entry barriers include setting a minimum amount of coins needed to join and run a masternode. There are also certain technical requirements for the machines used to run a masternode including the type of servers, storage space requirements, and IP requirements.
There are many benefits to investing in masternodes.
The first, most obvious one is that it comes with earnings or incentives. So you simply stake and earn on the stake as you assist in running the network. By comparing the percentage yield against the investment, you can choose the right masternode that gives the highest ROI. Apart from ROI, there is also the aspect of the technical requirements and how difficult it actually is to run a masternode in question. Actually, some of them are highly technical to set up and requires high-tech skills to manage, which is a major drawback for running and earning from masternodes right now.
For starters, since DIVI, you can now decide to either invest in tiered masternodes or just masternodes. Tiered masternodes will be explained later in section DIVI.
Dash currently has an ROI of around 7.54 percent per year with the price of one Dash coin going for $424.05. Additionally, you require 1,000 DASH coins, which converts to around $424,000 to stake a masternode going by the current price.
Nevertheless, you can expect to earn around $2,663 per month and $31,962 in one year.
Let's start here with Dash. With a tool called Dash Masternode Tool, you can run a masternode from all major hardware wallets such as Trezor, Ledger and KeepKey. With this tool, you can also vote on proposals and withdraw masternode payments without affecting the collateral transaction. And then, there are many Dash masternode monitoring tools you can leverage if dealing with Dash.
You can also take advantage of the several masternode hosting services that allow you to also keep control of the collateral but you need to transfer a portion of the collateral to the operator and the payouts are divided between multiple investors.
An ALQO masternode earns you about an annual ROI of 80.24 percent and you can expect around $281 per month and $3,376 per year. So it is not as good as Dash in terms of earnings but better in terms of ROI and you only need to invest 10,000 coins to stake the masternode. This converts to around $4200.
ALQO is trading at around $0.42. You should be able to compare all that with the benefits of investing a $4200 buying and selling this or other coins, and whether you can benefit from volatility as well. So, for instance, on Monday 5, the coin was around $1 and on January 20 it was trading at about $3.
You might also need a rented server or a PC that runs 24/7. If you are setting yourself up for the masternode for the first time, you can head here for the setup guide and know all what you need to or here for information on how to get started. Basically, you need some technical know-how on installing and editing the configuration files for instance. You can also choose to either compile the daemon on your own which takes some more time or download a pre-compiled daemon.
The DIVI cryptocurrency started just last year and introduced the idea of tiered masternodes. So for starters in masternodes, tiered masternodes are sort of level-based masternodes. Inside DIVI, you can decide to stake masternodes in five levels each of which has a different requirement for the number of coins to stake.
Geoff McCabe, the Co-founder of The Divi Project has explained what their masternodes are all about on this link. Basically, with a 100,000 DIVI coin, which translates to around $1,000 (at the price of $1.00 currently), you can run tier one -- called Copper -- of masternode. Being the lowest level of tier in their masternode means it is not the cheapest in this list as you can see. You can get to tier 2 called Silver with 300,000 DIVI, 1,000,000 coins Gold and 3,000,000 Platinum and 10,000,000 coins Diamond.
Silver comes with a 5 percent better chance of earning coins in this tier, Gold with a +10% chance, Platinum with +15 % and Diamond with +20%.
But that's not all for DIVI, which brands itself as bringing revolution to masternode staking: the project has One Click masternode set-up solution. So you can just run it with installation, and do not require a lot of manual processes in installing plus running as is with other masternodes. So it is a good thing for you who has little knowledge on cryptocurrencies and masternodes and are wondering what this masternode set-up is all about or maybe are spending weeks getting started in masternodes because of complicated set-up and skill shortage, to call blue color by its real name.
The only drawback here is that you will need some work doing ROI calculations to compare DIVI with other masternodes but that's not hard to do.
Monetary Unit gives you around 18.95 percent of ROI which is great compared to other masternodes in the list. Actually, a different calculation puts it at 20.84 percent. Really good. You will need 500,000 units, which translates to around $65,000 (at the price of $0.13) so it is quite expensive here but not as Dash for those doing hard masternode window-shopping here. Nevertheless, you can expect to earn around $12,152 per year or around $1,012 per month.
Good thing with Monetray Unit is that it has been around since 2014 so you got an experienced team and histories to look to.
Getting started with Monetary Unit masternodes now? Head over to their Github page. Nevertheless, you can run the masternode on a VPS server. Select the wallet that matches your computer and you can set up the masternode on Windows or Ubuntu Linux platform. Actually, they have a client that you will run and set up and get started, therefore, it is quite easy to do.
NEM masternodes require you to have 3,000,000 XEM to run a Supernode and 10,000 XEM to run a Harvester that also requires 6 XEM for the important transaction. With NEM, money vested can actually be traded at any time so there is locking here.
In NEM, the process of generating blocks and earning transactions in it for contributed efforts is known as harvesting. In this case, you do not create new XEM coins but just earn part of the transaction fee.
It looks like 10,000 XEM vesting is not profitable at the moment, so you might wait for a few more years. With delegated harvesting, though, you can delegate the responsibility to a Supernode and get profitable.
Delegated harvesting works when you are connected to a remote NIS or NEM Infrastructure Server. You can still do local harvesting in this case. Local harvesting works when using a local NIS.
There is no set up required for the default local harvesting. You simply set it up. However, there will be higher costs for electricity if you use a regular computer because there is no offline harvesting.
With delegated harvesting, you still harvest even when you turn off your machine because you are using a remote NIS. You get lower costs of electricity in this case if remote NIS runs on a VPS or microcomputer like Raspberry Pi 2, Cubieboard 3 or similar.
You also need some manual set up when running a delegated harvesting. You can head over to this page to learn more on setting up NEM masternode.
The ROI is about 5 percent annually.
PIVX masternode gives an ROI of about 5.74 percent annually and you can expect around $2,195 in a year or $182 per month after investing around 10,000 PIVX or around $38,300 with the current pricing.
The coins also do not get locked away and you can spend them any time you wish. Setting up the PIVX masternode can be hard work if you do not have technical knowledge.
Syndicate masternodes give the highest ROI in the list at 410.02 percent. You can expect around $9,134 per year or $761 per month after investing around $2250 or 5,000 units.
You can order through their masternode hosting services here