Passive Income: Hosting a Masternode is easier than You Think.

in #bitcoin2 years ago (edited)

As many of you may know, certain cryptocurrencies can provide passive income. While some of them can be staked (powered-up) through a user’s wallet, most other cryptocurrencies that issue a passive Crypto income require users to manage and set up their own servers.

Typically, a node that is able to gain passive income is termed as a Masternode. Essentially, Masternodes support blockchain networks through various means, including but not limited to network uptime and speed, transaction processing, provision of anonymity, and even creation of decentralized governance.

Maintaining a Masternode can be Tough

So, here's the thing. I’ve been self-hosting a Dash Masternode for a couple years now. I had a VPS on VULTR hosting provider. The service was good but there was always some degree of technical know-how required, and constantly monitoring developer’s updates was quite a hassle. The final straw that broke the proverbial camel’s back was when Dash rolled out their scheduled DIP3 activation update and I had to go over a 10-page technical document about Deterministic Masternode List registration process. With a need to put forth consistent effort, maintaining a Masternode seemed to be a just a little bit too work-intensive to be truly considered as passive income.

Check out the ROIs on major Masternodes here.

Now, I know some people outsource these tasks to a single Masternode manager, who will report to them directly. But the problem with this approach is that it can be difficult to find the person, who is reliable enough to always keep the Masternode running and updated. If I opt for this alternative, I feel I would have regular concerns over the Masternode uptime and would end up double-checking with the manager on a regular basis; again, this would break the passive nature of the Masternode’s income.

So, I did some research to see how people manage to maintain a Masternode without having to make a deal with the Devil. Eventually, I came across some businesses which provide Masternodes hosting service.

Could Masternode hosting services be the much-needed sigh of relief?

Convenience: Masternode Hosting Services

The Crypto space is still in a nascent stage so there aren’t many Masternode hosting options. From the get-go, I aimed to choose the one that had strong positive community feedback. I also wanted to try Masternode hosting for free before I had to pay for it and most services just didn’t give that option. Eventually, I managed to find one that did, and it was Allnodes. Naturally, I decided to give it a go.

Another factor inclining me towards trying out Allnodes was Hosting a Masternode on the platform for popular coins like Dash, Zcoin or PIVX was free until the end of their open beta period, and Masternode hosting was only $5 a month after that; a very competitive offer indeed. It’s the same price as I had on VULTR! I was getting a free trial, the price was low, and I found good reviews, especially in dedicated masternode communities; so, I figured why not give it a shot.

The Experience

In Crypto, things often aren't as simple as they may seem at first. However, setting up a Masternode on Allnodes turned out to be quite straightforward as the UI was really pleasant to look at and easy to navigate.

I shut down my current VPS and started to host my Dash Masternode on Allnodes. It was quick: I just had to enter a Dash wallet address that had the amount of 1000 DASH coins needed to run a Masternode, then just put a provided line in the masternode.conf file.

Surprisingly, I found out that they also had a special offer of 6 months of free hosting for Dash nodes and seed registration to keep my privacy. These last points were a big plus as I’ve gotten used to making anonymous Crypto payments for Masternode services. They're out of free 6 month plans for Dash, but if you happen to have a big stack of CRO ( Chain), you can host a CRO Council Node for free for 6 months.

After my Dash node had been successfully started, I was amused to find out that the entire set-up took me about 5 minutes to complete instead of several days. Having to deal with things like Deterministic Masternode List registration processes immediately became a thing of the past as the service includes full management of developer updates.

The main thing that pulled me into Masternode hosting is the almost impossible self-registration on the Deterministic Masternode List.Moreover, Allnodes only needed my wallet address to initiate the Masternode support. All the block rewards issued to the Masternode are innately delivered directly to the wallet address that holds the stake. No Masternode hosting service ever comes in contact with the block rewards as they just make sure the Masternode is running. So, there was no concern about someone running off with my funds and there was also no concern about someone trying to claim my block rewards.

Plug and Go Services are the Best.

In conclusion

Established Masternodes provide a Crypto ROI that can vary from a few to even hundreds of percent; it really depends on the cryptocurrency in question. So, plenty of hodlers end up setting them up. Considering how utterly difficult self-hosting can be, especially if a person wants to host multiple Masternodes, secure Masternode hosting services seem to be a pretty good option; I just wish I came across them earlier.

Just a few years ago, the opportunity to host Masternodes was only available for people with good technical knowledge. That’s why gaining a passive income from coins wasn’t easily available to the mass market. However, as the Crypto space has grown, it’s nice to see that services that make Masternode management easier have arrived. Now, anyone who’s hodling coins that can be used in a Masternode needs to put just 5 minutes and get a passive income rolling, and he/she needn’t be concerned about maintaining it.

Also, at the bottom of this page there's lots of interesting Masternode stats; plenty of insight on regional participation, daily Masternode income, and Masternode market caps.

Since I’ve seen some posts on Masternodes here before, I’m curious to hear other people’s experiences with Masternode hosting services.
Please, share your thoughts and experiences below!

Connect with me:

My Twitter
PM me on Telegram

Cryptocurrency News Cryptocurrency Airdrops Best ICO List Ripple XRP News Ethereum News Crypto Bounties Blockchain News Blockchain Lawyers Recover Lost or Stolen Crypto


Secure Masternode services seem to be another step on our way of relatively smart money entering the market. Thanks for the great explanation!

Posted using Partiko Android

The potential for passive income will attract the big fish.

Speaking of passive income and attracting big fish, that is the exact goal of our project Our aim is to provide an investor-class platform (Which we feel we have achieved) for leasing Steem Power and thus attracting the big money to Steem, currently stakeholders are able to earn more than 17% APR for leasing their SP in a P2P fashion, sometimes there are leases above 20% APR as is the case at the moment. Unlike masternodes, leasing Steem Power has no server cost or expertise requirement for the end user and only takes a few minutes to do.

Another plus is that DLeass is based on Steem, which is a top 60 crypto that has been around for several years, the APR earned is not native to the chain, Steem itself has only a 9.5% per annum inflation rate (decreasing by 0.5% per annum); there are very few high yield masternodes in the top 100 by marcap and the only reason they give those returns is because that is their inflation rate, so you are investing in an inflationary token, which unless it has other utility, the inflation will dilute the price over time, so early adopters get the most benefit.

The APR offered by DLease is not based on inflation but rather market demand, the interest rate reflects what users are prepared to pay to rent Steem Power.

As CEO of BuildTeam, the developers of DLease, I would very much like to see DLease offered as an alternative to masternode investing to help bring about mass adoption of Steem. Check out the @dlease blog and consider using your influence to write about it to help the Steem community gain further external investment.

Dlease is my "go-to" site for delegating SP. Love this site... excellent project! I highly recommend

Awesome thanks for the testimonial! By the way I sent you an email. are you still wanting a TokenBB forum?

Sorry for the late reply... not sure if I do or not. Was just "kicking the tires" for now.

sure, will cancel you order

i run EXCL XZC and SYS :)

@hatu, Yes, many look for Passive Income but in reality nothing comes easy and for successful establishment sound ground work is needed.

Posted using Partiko Android

With Masternodes, work is being done.
The machine you delegate processes transactions, secures the network, or even anonymizes transactions.

Good to hear that. I don't have much Technical knowledge but i am going to pursue because now we are in era of opportunities. Stay blessed.

Masternodes are cool but you gotta find the right token... i tried to chase the high percentage ones and got rekt lol

What tokens in particular have you got burned for?

Yes, it's definitely safer to opt for the established ones.
Naturally, the higher ROI ones come with higher risk.

Thanks for the insight into an easier path for setting up masternodes. My experience has been more like your earlier attempts and now I may take the less tedious approach you layout here. Keep up the great content.

Glad to help! :)

Wow thanks a lot for letting us know this sounds really interesting all ways wanted to do this but never really understood it. I will check out these websites!

Posted using Partiko Android

Get those masternodes now, think of how much the right ones will be worth in the next major bullrun

Fingers' crossed.

Thank you for your post... very helpful content! I’m new to masternode, but after reading your post I will def take a look deeper on...

Posted using Partiko iOS

One question... masternode is the same as staking coins?

Posted using Partiko iOS

Yes, except Masternodes require a minimum amount that must be bought in order to qualify for staking rewards.

So, just trying to understand masternode better... taking Dash as example, can you stake Dash coin and also masternode Dash, in two different process? Another question, is cheaper to masternode than to stake?

Posted using Partiko iOS

Staking Dash = acquiring a Masternode.
However, a Dash Masternode could be a bit expensive, so you can look into all the other options. Some Masternodes are available at far lower prices.

You're welcome to ask me more details. :)

Interesting piece

Unfortunately, I don't have the funds for even the cheapest of them all ($1.8k). I'm barely able to keep up with my finances

Thanks for the info

Resteemed for awareness

One of these days. :)

I have been looking at TomoChains masternodes and they seem pretty interesting...

I'll have a look at those.
Thank you for the suggestion.

Thanks for the your thoughtful post but just wanted to highlight something, with no disrespect. Shared Masternode services are not good, such as Midas ( or any other ones ), because you do not have control over your coins. If Platform gets hacked? One will loss all of their investment.
i still think it is good to have coins In your own wallet, where you control your private key. Again its just my opinion, I could be wrong.

I suggest reading it again.
I myself specifically wanted to avoid having my coins to anyone else, hence I found Masternode hosting services that just need a wallet address; key and custody of assets stays with me.

Woow, yeah, I think one's key security is the most important here as it is seen to most blockchain technology. Thanks a lot for your help.

And if I can get convenience without sacrificing security, it's a win-win.

Would love to hear what is your take on baking Tezos (XTZ) or delegation on Cosmos (ATOM).. I am thinking about investing on either one of them perhaps you can give us an insight about the two or on each.

My concern with ATOM is that its price hasn't matured yet. We're seeing wild side-ways movement repeatedly.

@hatu Heya!! Thanks for updating the community... Keep it up.... Keep going.... Undoubtedlly masternodes are awesome but I suppose it is quite difficult to find right tokens... Right? Btw resteemed it =) Thanks once again =)

Posted using Partiko Android

Finding the right one is the challenge.

Thoughtful knowledge , another was to help block chain networks . Going to look further into this . Thanks for putting time to post this.

A masternode is a complete node that holds the complete copy of the blockchain. These complete nodes are connected to a network from which transactions are made. The motherboards serve to solidify the network by making it possible to create, receive and transmit useful information to the blockchain.

In return for the service given to the community, people who set up masternodes are rewarded regularly with dividends paid in the form of cryptocurrency. However, to be eligible for the masternode and win the trust of the community, an entrance fee must be paid. This right of entry is called the collateral. This is the number of wedges needed to be allowed to own a masternode. Depending on the currencies, the collateral varies. The first coin to launch the principle of the masternode is Dash.

So what I understand about your statement is that the wallet with the 1000 DASH is the collateral for the Masternode... so the investment is quite big (as of today it would be $117,360 USD Coinmarketcap price when writen). Are any other options that you would consider if the initial capital for investing is not as big as the one required for DASH?

Dear @redouanemez

Thank you for this reply and sharing your view on masternodes. Definetly one of the best comment I've read in this thread.


Thank you for the detailed information on what a Masternode is. :)

Dear @hatu

Great post buddy

I haven't been paying attention to masternodes for past few months, but as far as I remember - I couldn't find almost any masternode out there (except of mentioned DASH, PIVX and maybe few more) that was worth investing in.

The biggest issue I see with masternodes is the fact, that investors are receiving "dividents". Which means that all those masternodes should follow very strict law and regulations and should be considered a security token.

From my experience almost every masternode out there has been launched as an utility token. And there is no way anything that provide dividents could be considered to be utility token. For that reason I found it very risky to invest in any masternode.

Also let's keep in mind, that most masternodes are providing very high ROI and giving no ownership / utility. So in a long run it's hard to create demand for those coins. So we're dealing with hight ROI, which will constantly increase supply - and that is a main driving force that will eventually bring the price down.

I had to go over a 10-page technical document about Deterministic Masternode List registration process.

OMG. That would put me off as well :/

Have a great upcoming week buddy
Yours, Piotr

Are these safe? Is there a history. Many of these passive income ends up zero value or almost zero value.

Wow...such a down to earth content about masternode hosting. I believe many of your audience would really be enlightened after reading this post. Great job man and keep it up!

Your friend,
Kelvin :)

Thank you, Kelvin. :)

this is a good read to look into

Congratulations @hatu! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :

You received more than 150000 upvotes. Your next target is to reach 160000 upvotes.

You can view your badges on your Steem Board and compare to others on the Steem Ranking
If you no longer want to receive notifications, reply to this comment with the word STOP

Vote for @Steemitboard as a witness to get one more award and increased upvotes!

Is it possible to host Masternode for not more than $1USD monthly?

Hmm, there might be some shared MN services.

I have one coin which gives 200% APR but it is only about 2$ monthly.. so to make it profitable server couldn't cost more than 1USD/month or so

Gracias por la información muy interesante.

I use xsn masternode. I earn extra.

Posted using Partiko iOS

I'll have to look into it.

a ton of people lost a lot of money in running smart nodes, back in 2018 people setup masternodes for Dash (million dollars), polis and you name it. I tried smartcash, which i thought was a good team. Lost 95% of the value

All Crypto bought at the 2018 peak resulted in a loss. Even STEEM.

Can't wait to start having this much upvote.

Posted using Partiko Android

I'll try it
Thank you

Dear #hatu , The MasterNode is coming in the market. It is obviously glad news to the general customers. If they can understand just the way and act as they can work, the campaigners will have to work. Thanks for bringing new updates.

What's the roi from allnodes? Like the corrected roi after trying it out

Dash MN is so expensive..🙀

It wasn't in early 2017. 😁

Yes, I miss that. I started crypto 2018, and since then all is dropping😔

Someday if I can have enough funds, can I ask you to teach me this?

Posted using Partiko Android

I invite you to visit Weenzee. A site with very interesting investment rates on cryptocurrency. Thank you!

Love the notion of having passive income from crypto. Hoping that this really catches on in the near future and becomes a viable income stream. Thanks hatu for this super thorough article.

everything is achieved with work, dedicating time and discipline to success. great friend publication

Interesting piece, hosting a masternode would not fall in the passive income category if so much is spent on the infrastructure. So you did a good job on you research and finding a way to get by. Many will benefit from this article.

Posted using Partiko Android

Congrats bitcoin investor more gain chart is goin up

Posted using Partiko Android

Thanks for this content about masternode.

Excelente post, contenido muy bueno. Felicidades y gracias por compartir!

Resteemed ! Good Read

Thanks for the post.

Coin Marketplace

STEEM 0.17
TRX 0.03
JST 0.021
BTC 16926.23
ETH 506.90
SBD 1.10