What are Blockchain Masternodes:
We believe that the blockchain industry is in its infancy and provides substantial growth opportunities.
We believe that the blockchain industry is in its infancy and provides substantial growth opportunities. According to Computerworld, a leading industry publication, they feel that distributed ledger technology (or blockchain) is the most disruptive technology in decades. It has the potential to eliminate huge amounts of record keeping in turn saving money and disrupting information technology not seen since the arrival of the Internet. Various applications for blockchain include payment of good and services using cryptocurrency, supply chain management, enhanced security, accounting and the validating of auditable transactions, healthcare records verification, human resources during the hiring and ongoing employee maintenance process, sales and marketing, and a host of other applications. Worldwide spending on blockchain solutions is expected to reach $2.1 billion in 2018 according to estimates from IDC. They expect blockchain spending to grow by an estimated 80% per year reaching $9.7 billion in the year 2021.
What is a Master Node?
A Master Node is a computer (or node) attached to a network that keeps the full copy of the blockchain in real-time. A Master Node is different than a regular node in that they have increased intelligence and perform several other functions apart from just keeping the full blockchain. Some of these functions include:
• Increasing the privacy of transactions
• Doing instant transactions vs. those with longer lead times – very important when buying a good or service
• Participating in governance and voting
• Enable budgeting and a treasury system for the cryptocurrency
It is a requirement that the owner of a Master Node purchase a minimum amount of the cryptocurrency that it will be verifying prior to the node becoming operational. This minimum coin amount requirement is by design and is predetermined by the management team associated with the coin. By requiring Master Node operators to also own the underlying currency this helps to ensure that they will operate their node properly due to them having “skin in the game” as an owner
Why Master Nodes
• Potential for dual income streams – Master Nodes provide the opportunity to invest in Digital Currencies (the initial purchase of the coin) with the added benefit of earning guaranteed extra coins through transaction verification on the blockchain
• Significant upside potential – In addition to earning fees from verification services there is the ability to earn revenue from the potential price appreciation of the underlying digital coin that we would own
• High overall ROI opportunities – The key is choosing the right coin projects based on their current price, management, historical funding of the project, utility of the coin in the marketplace, and overall risk profile. Many coin projects have returned a double and sometimes triple digit ROI over an annual period. There are also many projects that have failed and we will do extensive research together with our Technical Advisor, Blockchain Assets Group, prior to choosing those projects in which to invest
• Ability to incorporate an “asset-light” model – We plan to use third-party equipment providers for all of our data room processing hardware – this leaves more capital to purchase coins and start Master Nodes
As there are many coin projects out there today it is imperative that we choose the right ones based on their overall risk profile. Many projects have little to no technical data to back up their business plan and the coins have failed. Also limited information on the team attached to the specific project would raise significant concern for us as well. Our internal due diligence approach to undertaking a new coin project for our Master Nodes will include, but not be limited to, asking the following questions:
• What is the utility of the coin and does it have real-world applications?
• What has the coin and their team accomplished to date regarding milestones?
• How transparent is management and the development team – also what available information is there on their background?
• How thorough and descriptive is the coin project’s white paper technical analysis?
• Have the developers updated their software code recently to indicate that their project continues to move forward?
• How many Master Nodes are currently attached to the project?
• What is the price of the coin and do we feel that it is fairly valued today?
• What are the daily/monthly/yearly transaction fees and how stable are these going forward?
• Chances that the coin will appreciate significantly over time?
• Does the overall risk to reward make sense for the project?