We’ve already established in previous articles that masternodes are one of the ways to generate passive income from cryptocurrencies. A masternode is a special type of node on a blockchain network that performs important functions such as validating transactions, storing data, and managing consensus.
Masternodes generally require a certain amount of collateral to be staked, and they can be expensive to set up and maintain. Take Dash coin, for example, it will cost you around $40,000 to own a masternode on the blockchain. While there are lesser-priced masternode coins, the consensus is that operating a masternode is expensive and may cost anywhere from a few hundred dollars to thousands of dollars.
Given the high cost and technicality involved in setting up a masternode, shared masternode hosting services have become a preferred option for people who want to participate in masternode networks but do not have the resources to set up and maintain their own masternode.
In this article, you’ll learn about shared masternode hosting services, their pros and cons, and what to look out for in choosing a service provider.
What is a Shared Masternode Hosting Service?
As the name suggests, a shared masternode hosting service allows users to participate in masternode networks without having to own the necessary hardware or technical expertise. With a shared masternode hosting service, users can simply purchase a fraction of a masternode and earn rewards based on their ownership percentage. This can be a great option for people who want to participate in masternode networks but do not have the resources to set up and maintain their own masternode.
There are a number of shared masternode hosting services available, and each one has its own advantages and disadvantages. Some of the factors to consider when choosing a shared masternode hosting service include:
- Reputation: The reputation of the service provider is important, as you will be trusting them with your funds.
- Security: The service provider should have strong security measures in place to protect your funds.
- Fees: The fees charged by the service provider should be reasonable.
- Coin support: The service provider should support the masternode coins that you are interested in.
Benefits of Shared Masternode Hosting
- Cost-effectiveness: Shared masternode hosting can be a cost-effective way to participate in masternode networks. This is because you do not have to purchase the collateral or maintain the hardware yourself.
- Ease of use: Shared masternode hosting can be a very easy way to participate in masternode networks. This is because the service provider handles all of the technical aspects of running a masternode, so you can focus on other things.
- Security: Shared masternode hosting providers typically have strong security measures in place to protect your funds. This is an important consideration, as masternodes require a certain amount of collateral to be staked.
Drawbacks of Shared Masternode Hosting
- Fees: Shared masternode hosting services typically charge fees for their services. These fees can vary from service to service, so it is important to compare the fees before you choose a service.
- Less control: When you use a shared masternode hosting service, you have less control over your masternode. This is because the service provider is responsible for managing your masternode.
- Lack of customization: Shared masternode hosting services typically offer limited customization options. This means that you may not be able to configure your masternode to your exact specifications.
Examples of Shared Masternode Hosting Service Providers
- Allnodes: The platform provides non-custodial staking and masternode hosting services.
- Crowdnode: Non-custodial masternode hosting provider for Dash coin.
- NodeHub: Trustless masternode hosting platform offering easy-to-deploy masternode services.
- Gentarium: Popular shared masternode hosting service that offers a high level of security.