Dash Masternode: what it is and how much you can earn

Dash masternode

DASH is one of the most private cryptocurrencies, the work of which is supported by Masternodes. In this post, we will tell you what a Dash Masternode is, how to create it and the most interesting thing is how much you can earn from it.

What is a Dash Masternode?

In simple words, a DASH Masternode is a server that verifies and validates transactions on the cryptocurrency network for a certain fee. Like bitcoin, Ethereum and other cryptocurrencies, Dash operates on the Proof-of-Work (PoW) consensus mechanism. That is, DASH miners verify all transactions and aggregate them into blocks. However, on top of PoW there are also masternodes, which actually allow almost instant and most importantly – anonymous transactions with very low commissions.

By the way, speaking of anonymity. In the DASH network, it is ensured by integrating the PrivateSend technology: each transaction is divided into several parts, each of which passes through a Masternode an average of five times and then reaches the recipient of the assets. Masternodes also remain completely anonymous, as does the sender.

The DASH masternode does the following:

  • Mixes transactions.
  • Verifies transactions
  • Votes on the further development of the network

Creating a Dash Masternode

The biggest drawback of the DASH ecosystem is that only a very large coin holder can become a masternode, namely 1000 DASH worth $148,000 (at the time of publication at the rate of $148 per coin). The entry fee is really huge, but you should keep in mind that the creators of DASH intentionally set such a condition to “filter out” small and medium investors.

The conditions to create a Masternode are very simple: to have a budget server and 1,000 DASH in your wallet.

Also, until recently there was a concept – share masternodes. That is, hundreds of holders of small numbers of DASH could join in pools to collect the cherished 1,000 DASH. But this way of making money with masternodes didn’t become popular, because private keys for access to the deposit had to be given to the provider of the service (pool), who could run away with all the assets. Moreover the developers of DASH themselves categorically do not recommend to use shared masternodes.

How much can you earn on Dash Masternode?

Now we come to the most interesting part. In the Dash cryptocurrency network, the reward for creating a block is distributed as follows:

  • 45% to miners;
  • 45% – to masterkinds;
  • 10% – to the project fund

You should agree that these conditions are very fair and transparent.

As of December 20th block creation fee is 2.7 DASH (approximately $400) or 1500 DASH per day. There are 4418 masternodes, each of which receives 0.00061 DASH per block, or 0.3395 DASH per day.

Thus, each masternode with a balance of 1,000 DASH can earn $50.2 per day of passive income or $18,340 per year. The payback period of $148,000 will be 8 years. But you should always keep in mind the growth of cryptocurrency prices. For example, if you deposited 1,000 DASH in July 2020 ($70 per coin) and unlocked assets a year later – in May 2021 ($440 per coin), you can make 6x on deposit growth.

Launching a DASH masternode

To run the masternode on your own server, you will need:

Linux operating system (preferably Ubuntu LTS edition)

  • Processor 1 GHz
  • 2GB RAM
  • Disk 20-30GB
  • Available traffic 500GB (1TB preferred)
  • Dedicated IP-address

But some investors choose to host the masternode on a VPS such as DigitalOcean, Hetzner or Amazon. It’s much easier and more convenient. Especially since the server fee for a masternode won’t exceed $10. You will only need an official Dash Wallet and that’s it.

Warning. Launching masternode on virtual servers (or on your own) is a very complicated thing, which requires experience with the command line and Linux. That’s why the vast majority of large DASH holders run masternodes on dedicated hosting services.

However, their cost is twice as high as on virtual servers. But the price is due to the fact that users do not need to configure the server themselves. All they need to do is to download the configuration file and synchronize it with the DASH wallet.

You can read all the startup manuals on the Dash forum. 

To summarize

Having 1000 DASH and launching mastercard is your stake and belief in the great future of the project. However, due to the unpredictability of the DASH exchange rate – messing with masternodes is quite risky business. The price of cryptocurrency can grow 5-7 times and fall in the same amount (the bright example is the fall from $1550 to $70 in 2017-2018). In other cases, you can take a closer look at DASH staking, such as on the Binance exchange.

About Ankur Suri 17 Articles
Ankur Suri is a blockchain developer who became interested in cryptocurrencies while studying at UCLA. He follows cryptocurrency market news closely and is as passionate about writing as he is about programming. Together with a group of crypto enthusiasts, Ankur is involved in the development and promotion of the alternative Dash wallet, aiming to provide users with the most convenient tool for transactions with this coin.

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