by Geoff McCabe, CEO of The Divi Project
Masternode Systems are part of many PoS (Proof of Stake) cryptocurrencies. When a coin holder has enough coins for a masternode, he or she can send a specific amount of coins into a node’s wallet, and they earn newly minted coins when blocks are produced. The system was developed to replace the “Proof of Work” system invented by Satoshi Nakamoto as part of Bitcoin.
The masternode software can be thought of like a different version of mining, with far less power consumption. The masternode communicates with other nodes in the network and keeps a copy of the blockchain, constantly checking and updating it. The software is very cumbersome to install and ordinary users are usually unable to do it without expert help. When something goes wrong, they often find they can’t get it restarted.
The Divi Project vastly improved the entire Masternode concept in many ways, such as:
MOCCI: A true one-click cloud-based Masternode solution — Ordinary people are able to use an intuitive interface to easily install it in the cloud.
Layered System — Until now, masternode systems only had one type, so coin holders would need to set up many computers with many masternodes, or multiple cloud hosting accounts. We’re reducing that hassle and expense by creating a tiered system, so that people will be able to accumulate more DIVI and improve their masternode’s chance to earn block awards.
Tiered Masternodes Breakdown
100,000 Coins — Copper
300,000 Coins — Silver +5%
1,000,000 Coins — Gold +10%
3,000,000 Coins — Platinum +15%
10,000,000 Coins — Diamond +20%
The chance of earning coins at each masternode level improves linearly with the number of coins. For example, the Gold Masternode is 10 times more likely to earn coins than copper, plus 5% bonus. We believe this system will encourage people to hoard or purchase more DIVI to reach the next level, helping to create a healthy node system.
We’re also looking into the possibility of using different node level to perform different functions within the network.
Masternode Calculation Formula
Here’s the math to calculate the chance that your node will win each block:
MNT/(#MC + #MS*1.05 + #MG*1.1 + #MP*1.15 + #MD*1.2)
MNT = MasterNodeType (Copper = 1, Silver = 1.05, Gold = 1.1, Platinum = 1.15, Diamond = 1.2)
#MC = Amount of Copper Masternodes
#MS = Amount of Silver Masternodes
#MG = Amount of Gold Masternodes
#MP = Amount of Platinum Masternodes
#MD = Amount of Diamond Masternodes
Governance and Community — Current masternode coins don’t allow for any easy way for coin holders to talk or even find each other. Divi’s new system will eventually have p2p and group chat functions, making it easy for masternode holders to form a tight-knit community to support each other, our network, and the Divi eco-system.
Cost of Entry — In order to acquire a popular masternode such as Dash or PIVX the cost is around $25k for PIVX, or $200k for Dash. Divi’s masternodes will start much lower.
Intuitive User Interface: All current masternodes use a very similar boring interface that is plain, non-intuitive and lacking in features. Divi’s team includes a world-class UX/UI expert and we have designed a user-friendly interface making the process easy and fun. This is probably the most-requested feature across all cryptocurrency masternode communities. We are adding easy-to-view stats such as earnings history, current block, coins in circulation, total global masternodes, coin value in USD/BTC, community proposals, voting % approved, and more.
Masternode coins are currently one of the most popular and sought-after types of cryptocurrencies because they inherently offer more to a coin holder than other types of cryptocurrencies do. That’s because a masternode holder can gain even if the value of the coin isn’t rising. The Divi Project’s masternode system offers the following inherent benefits:
Block Rewards: Divi masternode holders produce a constant supply of new coins for the owner, as payment for helping to maintain and secure the Divi network and blockchain. Coin scarcity: Masternodes, and staking in general, encourage participants to hold onto their coin, rather than selling it.
Community Building: A coin is only as useful as the community that supports it. A masternode system creates a natural community of stakeholders from around the world, who regardless of race, religion or creed, inherently have the same common goal of supporting and improving the coin’s utility and the technology that backs it.
Owning a masternode gives participants a great sense of pride and belonging to the community. Many opt to own multiple masternodes in a coin with the intent to just sit back and let their coins grow over time as a great source of income. One of Divi’s primary innovations is its new Masternode system, designed to support the “brand” and encourage community participation by its stakeholders.
WHY A TIERED MASTERNODE SYSTEM?
I created the idea to solve a very specific problem that plagued other masternode coins. How do we pay high rewards without masternode holders just dumping their coins on the market and pushing the price down? I saw this happening with every other masternode coin that had high payouts.
The solution was to gamify it by creating tiers. And it worked exceedingly well! Our masternode holders covet the higher tiered nodes and hoard their rewards so they can “level up.” Not only that, but they often buy more to get there faster, especially when they approach 80–90% of what they need, they’ll go to an exchange and buy more DIVI. Gamification should be “Tokenomics 101" but few other cryptocurrencies have caught on to its importance.
WHY PROOF OF STAKE?
The rise and evolution of cryptocurrencies began with Bitcoin. Now almost ten years later Bitcoin still uses the same Proof of Work (PoW) mining process to support and run the network. Miners compete to solve increasingly harder mathematical problems to win a block reward. Although PoW is effective, it becomes more inefficient as the network grows, requiring special hardware and extremely wasteful energy consumption to keep up with computational demand. As a result, currently this is only profitable for big business setups located where energy is very inexpensive, and PoW cryptocurrencies are losing their distributed nature, with the power to control the future of the coin concentrated in just a few entities.
Proof of Stake (PoS) is currently the best answer to this problem since it requires very little electricity and re-democratizes the power to control a cryptocurrency. This is why Ethereum is working to change its technology to PoS.
The PoS system works by allowing anyone with a computer and internet connection to become part of the network that secures and updates the blockchain. By holding a certain amount of coins in a wallet or masternode, “stakers” can gain a share of the newly minted coins when new blocks are created. These newly minted coins act as payment for their contribution to support the network.
For more information, visit our website: www.diviproject.org