2018 Masternode Encyclopedia In Layman Terms. Chapter 5 of 5

2018 Masternode Encyclopedia In Layman Terms. Chapter 5 of 5

Are Masternodes legal?

Laws change. Technically, nothing stops the government from banning every form of crypto that’ isn’t their own, once they invent their own.

In the Summer of 2017, some DASH masternode owners got terrified of possible lawsuits. Paying tax on masternode rewards wasn’t the scariest one. What some DASH masternode owners lost sleep over the “illegal money laundering” issue.

Let’s look into it:

You see, masternodes offer a complete privacy of a transaction with a technology called “mixing”.

Here’s how a transaction works without the use of “mixing” technology:

Crypto Enthusiast A sends 100 crypto coins to a Crypto Enthusiast B, a transactional record of 100 coins sent from address x to address y is stored in the blockchain forever. Anyone interested could see the transaction, state of the wallet, number of confirmations, etc. can easily do that at will.

What “mixing” technology does is that it splits 100 coins into many smaller transactions. For the sake of showing an example, let’s say 100 coins will be sent in 100 transactions, not one.

It will be a tough task (but not impossible) to track 100 transactions and then prove all 100 coins went to a Crypto Enthusiast B.

That could be considered “illegal money laundering”.

This technology called “mixing” scared (or motivated) a lot of DASH masternode owners. There hasn’t been any public crying in chat rooms or forums or messages typed from a jail cell by an arrested DASH masternode owners.

In 2018 the entire market crushed, billions of dollars were cashed out and author assumes public attention is not with masternodes anymore. Governments seem busy with other important tasks that demand attention, so the author assumes cryptocurrency masternodes are somewhat “safe”.

Will masternode investors be “safe” in 2018, 2019 and years to follow? Most likely — YES — but we shall live to see…

Are Masternode Securities?

No, masternodes are not securities.

The ruling comes from a 1946 U.S. Supreme Court case that classifies a security as an investment of money in a common enterprise, in which the investor expects profits primarily from others’ efforts.

In case of masternodes, there don’t seem to be any “efforts by others” because masternode investor’s profits come from his own (or shared) masternode.

In addition to that, on June 6, 2018, The United States Securities and Exchange Commission chairman Jay Clayton made it clear that: ( Source )

  • U.S. SEC will not bend the rules for cryptocurrency when it comes to defining what is and what isn’t a security
  • The agency is NOT adjusting rules for ICOs. “If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,” Clayton said, “If you want to do any IPO with a token, come see us.”

How’s that relevant to masternodes?

The author of the article believes that people at the top don’t care about masternodes.

How Many Masternodes Are Out There?

First things first, as of end of August 2018, there are about 434 masternode coins.

Those 434 coins result in 228,917 masternodes online.

All of 228,917 masternodes can be bought (or sold) for $965,212,676 or 143,637 BTC

24 hour market volume is $252,828,550 or 37,567,92 BTC

If you even want to know the numbers please check out the web site https://masternodes.online/

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