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Picking a Masternode

Masternodes, you've heard all about them. They promise to provide passive income while you #hodl that sweet sweet crypto. But with so many options how can you possibly pick just one? Well boys and girls, sit down, grab a drink and maybe a snack, and read my guide on picking a #masternode.

Disclaimer: This guide is for beginners

What is a masternode? (skip if you already know)

Masternodes are essentially computers that do a service for the blockchain. These computers are full of cryptocurrency and have a full copy of the blockchain which is kept up-to-date. These services mostly include help with processing transactions, keeping these transactions private, allowing for instant transactions, voting, etc.

To start a masternode you must have a certain amount of the coin you wish to use. These amounts tend to vary depending on the coin. These coins will then be locked into your masternode. DON'T WORRY, you can stop the masternode at any time and take your coins back. As the masternode runs it will periodically be paid in rewards of the coin which can be seen as passive income.

Websites

The first step in looking for a masternode is knowing where to look. Here are a few places to get you started. Take your time to get familiar with the websites and pick one that you find more useful.

1. Masternodes Online
   
2. Masternodes Pro
   

What to look for

There are 4 main things to keep in mind when picking your masternode. Your budget, ROI, volume, and longevity/reputation of the project. These are a good place to start when ranking all of your options.

1. Budget
   This is a simple one, how much are you willing to spend? Remeber it is never a good idea to invest more than you can afford to lose. If this is going to be your first masternode, start small and gain some experience before you start investing your life savings.

2. ROI
   ROI (Return On Investment) is the percentage of your initial investment that will be paid to you annually. This means that if your masternode costs $100 and the ROI is 10% you would make $10 at the end of the year (these numbers are just examples). Keep in mind that high ROI does not mean a good coin. When browsing for masternodes you might come across coins that have an ROI in the millions. These coins are usually very young and their price will fall off in a couple of days. The reasoning for this is because of volume.

3. Volume
   Volume is how much of the coin is being traded per day. You want to see a coin with very high volume because it indicates an active coin that can be sold off easily. If you decide to pick a coin with low volume you may have a hard time trying to sell off your coins. Look for coins that have volume amounts above the thousands to begin. Eventually, you'll want to get into even higher volume coins but they might be outside of your budget right now.

4. Longevity/Reputation
   One of the most important things to do while picking your masternode is doing research on the project you're thinking about investing in. Has the project been around for a long time? Is it being actively developed? What's the community like? Does this coin have a future? These are just some of the questions you should be asking yourself when picking your coin. You don't want to hop onto young coins without first understanding the project and you don't want to join dying coins. Find projects that you think have a lasting future because the future of your wealth depends on it.

As you may have been able to tell, all 4 of these elements work together quite nicely. There is a definite balance to be met for each of these and there do include exceptions to every rule. I wish you the best of luck on your crypto adventures. Happy hodling!!!

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