The word, masternode, is pretty f**king intimidating. The guy pictured above could be a masternode for all I know. He’s got a mask on and seems just as untouchable as the word, masternode. Is he a real, live masternode?
“A master what???????? A node? What the heck is that? Is that like a lymph node?”
To understand what masternode means, we have to start with the word, node. I’m a very visual person so when I first heard the word node, I imagined some kind of enlarged, disgusting gland that’s trying to fight off a terrible infection (lymph node). And then when I put ‘master’ in front of that image…..well, it didn’t really sit well in my mind.
Node has tons of different definintions, but in this case, we’re only going to concern ourselves with the field of computer science.
Here’s the definition of node from wikipedia:
“A physical network node is an active electronic device that is attached to a network, and is capable of creating, receiving, or transmitting information over a communications channel.”
Basically, a node means one computer in a network that is communicating with other computers in that same network. So if you’re just surfing the internet on your computer, you’re not using a node because you’re just surfing it by yourself and are not connected to a specific group of computers with a shared community network. Node implies your computer is part of a specialized computer network.
In the Dash ecosystem, there are two kinds of computers that secure the blockchain: nodes and masternodes. Nodes do the mining that creates new coins on the Dash network, and masternodes perform specialized transactions like InstantSend and PrivateSend. I’m simplifying this greatly, so if you want to go deeper, go here.
There’s also another very important distinction between nodes and masternodes as far as responsibilities.
Masternodes sustain and care for the Dash ecosystem like parents, while nodes are like teenagers mining for coins. When miners mine for Dash or any other coin like Bitcoin, etc., they often convert these coins into either USD, Euros or other coins. Many miners tend not have any particular loyalty to any one coin. They’re the worker bees and they can make money by mining lots of different coins. It makes economic sense to do this.
However, this is not good for the development of any one particular coin if the miners aren’t loyal and don’t act as shepherds.
In Dash, the masternodes represent the layer that is responsible for caring, cultivating and expanding the Dash digital currency as a whole. It’s also the layer that makes the governance and treasury decisions. The best part of this masternode network is the fact that people can come and go freely, so the success of this network is not too dependent on certain individuals. This makes it a more decentralized structure because a CEO is not choosing people to run the masternodes. People are deciding by themselves to join Dash or leave voluntarily.
This 2-tier system contrasts starkly with Bitcoin which only has a 1-tier system.
Bitcoin is looking more and more like an unruly teenager without parents. Dash has evolved parents. Bitcoin has no second governance layer that performs specialized functions like conflict resolution, outreach & marketing, artist and developer involvement, and so in my opinion, it’s not well equipped to make important decisions. Strong factions have developed within Bitcoin’s ecosystem and there is no clear way to resolve these differences. Governance was never programmed into Bitcoin’s ecosystem. Bitcoin is a technological breakthrough, not a social breakthrough.
If someone loses interest in Dash, he/she can sell the masternode and thereby give up voting rights. Conversely, if a newbie enters Dash and gets excited by the project, he/she can buy a masternode and begin helping the network grow.
The main thing to know about how to get a masternode is this: you have to invest 1000 Dash into it, and then not touch that money.
This means you cannot withdraw, convert or send it out of your wallet. Once your balance drops below 1000 Dash, you lose your voting rights and are effectively blocked from the Dash masternode network.
So, now that Dash has risen dramatically in price, it seems quite out of reach for most normal people who don’t have an extra $84,ooo lying around. When the masternode system was in place I would imagine one Dash was probably around $8, which would equal an initial investment of $8,000. Now it’s a much different story.
But if you got the goods and want to dive in, set up your own Dash masternode go here: http://dashmasternode.org/
So, what can you do if you want to get involved with a Dash masternode but don’t have 80 grand lying around?
Answer: invest in a masternode share.
The minimum amount to invest in a masternode share is 25 Dash. If you want more specifics about how to invest in a share, read this article which was written by ConnectEconomy who is currently invested in a masternode share. I haven’t done this yet, but am planning to do so. You can ask her questions about the masternode share in slack. Her name is @aniinl.
I can usually be found in the Dash Nation slack in a chatroom called Women of Dash. Here’s your invite code: https://dash-nation-invite.herokuapp.com/
See you in Slack!
If you have no idea what InstantSend and PrivateSend mean, watch Amanda explain it: