MARKNetwork Education Part 4:
What is a shared Masternode?
Until DASH came up with the concept of Masternodes, mining attracted a lot of attention from the crypto sphere. While mining required the collateral coins to be invested in buying the miner, it posed a higher degree of risk.
Masternodes put a focus on network participation rather than simply investing. While holding your cryptocurrencies you can choose to participate in a Masternode and power the network.
Why the need for a Shared Masternode Hosting?
A full Masternode puts across a high entry barrier as it requires the participant to own the full collateral to power a full Masternode.
To power a full DASH Masternode service you need to have 1000 DASH in your wallet. That amounted to be $ 88,000 US Dollars in Dec 2018. Not everyone owns that kind of DASH!
Crowd-funding has a solution to everything.
Lowering the entry barrier of a Masternode, the concept of shared Masternode hosting has been garnering a lot of attention. Fully automated shared Masternode hosting becomes feasible when users pool their coin holdings to create the full collateral. Let us say 10 participants come together and pool in 100 DASH each, they reach the full collateral and can now power a full Masternode.
The hosting service helps users come together to create a pool of coins to start a Masternode (1000 tokens in the case of DASH). Once the Masternode commences, the fees for powering the network are distributed to the participants based on the percentage of their overall participation.
Advantages of Shared Masternode:
• Users with coins less than the full collateral can also participate in powering the network.
• Someone with full collateral that does not want to risk their entire amount can choose to power a shared Masternode to mitigate their risk.
• An obvious advantage of a shared Masternode is that you still own your original tokens and can withdraw them at will.
• A fee is distributed to the participants that can be re-used in powering the network, can be transferred to a personal wallet, and can be exchanged with any other cryptocurrency or fiat.
Now remember – as you decide to participate in powering a network, it becomes your responsibility to do the due diligence. It is something that needs to be emphasized time and again:
• Find a transparent and trustworthy shared Masternode service provider.
• Do ample research and underpin the coin for which you want to power a shared Masternode.
• Monitor your tokens and Masternode fees, and make your own decisions on when to withdraw them.
How do shared Masternodes add value to the crypto sphere?
The popularization of shared Masternodes has shown the potential to stabilize the cryptocurrency and add to its store of value. As the participants have an interest in the stability of the network, it eliminates the chances of participants tampering the network.
Shared Masternode hosts also provide a quick and easy service for you to power a Masternode with the full management of your coins in your hands.
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