How not to invest in a masternode

in hive-175254 •  23 days ago  (edited)

HOW NOT TO INVEST IN A MASTERNODE.jpg
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The idea behind a masternode is to run a specific software on a web enabled device (usually a server) in order to support a project and help it remain functional and in some cases decentralized in nature.

The rewards of running a masternode are the tokens or the coin income that is your share of dedicating physical or virtual resources and the tokens you hold as locked in to be eligible to run the masternode.

Very simply put a masternode is a way to make your money work for you and letting your money make you more money. However this is easier said than done.

The ROI Trap

In a lot of cases people approach you trying to convince you about a high degree of return (Return on Investment = ROI).
A lot of this happens over telegram and other social media sites and groups dedicated to crypto.

So be cautious and a bit suspicious if a stranger approaches you with a masternode investment which is offering very handsome returns.

A lot of times people impersonating as a famous celebrity or as admin of the group may advertise or approach you with a juicy masternode investment offer.

The way forward...

Look for proof and do your own research. Let us see what would such an offer look like ...

1juicy offer.jpg

So would you be interested in such an offer?

The crypto world, like the real world is full of get rich quick schemes and offering you a visually appealing masternode is just one of the many ways to rob you off your money.

How to evaluate a masternode offer?

First check if the coin even has an actual masternode running? and if it open for people to participate.
Simply google "masternode" +"coin name" to start a search
Any masternode worth its salt would be listed on sites like

https://masternodes.online
https://www.mnroi.info/
https://mastersofnodes.com/masternodes-roi/
https://www.crypto-coinz.net/master-node-calculator/

Check if the project has its presence on bitcointalk.org

If it is present read what people are saying about the project in the thread on bitcointalk.org. Is it actively being moderated ? or is it some project which has long been dead.
No point investing in a dead project.

Is the presence of the site on the above site a reason to give it a green signal?

No

Ask some questions?

Does the info being provided matching with that shown on https://masternodes.online and the other sites matching with the one you have been given?

Visit the projects official site & Check

  • The Team: Do they have pictures, bios linkedin profiles? If no it raises a red flag
  • The Project Roadmap
  • Check their social media handles given on the site. Are they active? you can connect with the team and cross check and verify the information or clear any doubts. Do not assume ask questions about their masternode program.

Look beyond the ROI

A common trap is a very good ROI for e.g.

2price10cent.jpg

Next check the volume and marketcap
3volume.jpg

Here we see a red flag the volume is zero. In a lot of cases the volume is very low.

Implications of a low volume for your investment?

Suppose this coin needs 30000 coins to run the masternode.
So your investment @$0.10 cents would be
30,000 X0.10 = $3000

With the following income projection
4income projection.jpg

you should be getting a daily income of $35.5850 coins
Weekly income of $249.0950 coins and so on.

This is your coin income and to realize it in US$ or BTC you have to first sell them on an exchange.

Do check on the exchange where the coin is listed

With a zero or low volume you may have the coins however there may not be any buyers to take your coins.

In summary

Before you invest do your research

  • Ask questions and compare facts.
  • Those who want to scam you do not give you the complete picture.

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Disclaimer: This is not financial advice.The purpose of this article is for education purpose only. Please do your research and due diligence before making an investment.

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This article contains really good advisees, and it is really helpful to anyone who would be interested in getting a masternode. It feels tempting to go for a high ROI, but I guess it is safer to go for one of the bigger projects that you know have an actual volume on exchanges, and let us not forget... only invest and do so in projects that you believe in personally! :)

I get up from deep sleep read this comment and say wow all that research done to write the answer has paid off. Someone liked my post and expressed his/her views. All that burning of the midnight oil to write the post has paid off.( LOL)
On a serious note it feels good when you read a real comment from a real person.
Thanks for stopping my and posting your comment it means a lot :)

Well, it is awesome to read an article with content that comes actually useful and helpful! I have been thinking about masternodes myself, but haven't had the funds nor the will to go for it 100% yet... who knows? Maybe if Bitcoin goes to 3000 USD again and prices turn much down, the price of nodes will fall as well, and I might get in somewhere. Until then, I guess I will just dream about a ZEN node, a PIVX node, or some other cool node!