Long before Proof of Stake entered crypto consciousness, people were staking Proof of Work coins. In return for locking up a portion of tokens and running a masternode, you can earn verification rewards. Earning a passive income while helping to secure a network sounds as comfortable as it does noble. The reality, however, is that most masternode coins are a scam.
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Loads of Nodes But Little Utility
Every trader has a strategy for profiting through good times and lean. Some buy into ICOs and wait for the market to recover; some scalp profits where they can through day trading; and some set up masternodes. Dash is the altcoin credited with starting the craze for masternodes. Back when the coin was trading for under a dollar, the Proof of Work coin introduced a masternode system that called for staking 1,000 Dash.
The top 10 masternode coins by market cap. Check how thin the volume is for many of them
The scheme proved hugely successful, both as a means of governing the network, and as an earner for individuals running a node, who were being handsomely compensated by the time the crypto market mooned in 2017. At its peak, it would have cost $1.5 million to purchase enough Dash to set up a masternode. The success of the scheme, which made early adopters of Dash’s masternode system very rich, was soon copied by countless other coins. Dash has at least a modicum of real world utility, but most of the copycats that have sprung up since serve no purpose other than to enrich their early adopters and stakers.
Masternode Coins Are the New Lending Platforms
The crypto winter of 2018 has been especially unkind to
