4. Masternodes and Staking
Investments and earnings in blockchain and cryptocurrencies are now not limited to bitcoins. Along with methods mentioned in previous posts, Masternodes and staking are known to be great ways to earn passive income in the field of cryptocurrencies. Using the Proof of Stake (PoS) algorithm that is the basis of many new cryptocurrencies, staking involves the purchase of cryptocoins and holding them in a wallet for a particular period of time. Staking is a lot like putting fixed deposits in bank. For putting fixed deposits, you receive an interest as reward, similarly for staking you will be paid additional coins as a reward. The longer you hold these coins in your wallet, the better the reward is!
Coming to masternodes, in easy words they perform some specific functions like receiving transactions, increasing privacy of transactions, performing instant transactions and so on. A masternode is a combination of staking wallet and the server needed for fulfilling these functions. Since these masternodes fulfill these specific functions for a specific cryptocurrency but do cost money and effort to operate, they are incentivized by gaining a share of the block rewards in their respective cryptocurrency. To create a masternode, a user needs to lock in a specific amount of #coin, number varying for different coins. There is no need of expensive hardware, like in case of #bitcoin mining. Most masternodes generate 5-20% rewards providing the opportunity to invest in cryptocurrencies with the added benefit of earning guaranteed extra coins.
#Staking and #Masternodes are great ways to earn guaranteed rewards without engaging in costly infrastructure of #cryptocurrency #mining.
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