Why do you invest in cryptocurrencies? To understand how blockchain works, to hedge against inflation, or to make money? For an overwhelming majority, making money is the primary goal behind investing in cryptocurrencies. But the volatility of the crypto market could be intimidating for a lot of investors, especially beginners. To tackle this volatility, you need a solid understanding of technical analysis, fundamental analysis, backtesting, and algorithmic prediction. If you are trading cryptocurrencies while having a full-time job, understanding so many concepts could take years.

This is exactly why more people lose money in crypto instead of making money. So what’s the solution? The solution lies in leveraging passive income generation strategies. Setting up masternodes is one such passive income-generating strategy that not many people know about. If you are in the crypto market for some time now, you must have heard of concepts like staking and liquidity mining. Masternodes is an addition to the passive income generation avenues that helped me generate over $5k a month. But before we delve deeper into that, let us understand what are masternodes.

Everything You Need To Know About Masternodes

Masternodes are special types of nodes that are onboarded to perform specific tasks, including transaction validation, to facilitate faster transactions.

You need to lock up a certain amount of tokens as collateral to set up a masternode. Setting up a masternode makes you an integral part of a cryptocurrency network, often unlocking voting rights as well. The term masternodes gained prominence after Dash started its masternode program. As of now, there are several cryptocurrency networks, such as Morpheus.Network, are running their masternode program.

To set up a masternode, you need:

  • A specific number of tokens to lock up (as specified by the network)

  • A wallet to store your tokens

  • A dedicated hardware

  • 100% network uptime

How I Made $5k a Month By Setting Up Masternodes

It was about a year ago when I first heard about masternodes. At first glance, the concept of masternodes appeared to be very similar to staking. It is very similar to staking, except for the fact that masternode validators are likely to get decision-making rights. But more on that later. Let’s understand how masternodes help you generate a steady passive income irrespective of the market movement.

My recent masternodes investment was for Morpheus.Network, a supply chain platform which is part of Google accelerator and has been adopted by big enterprises since 2017. As a thumb rule, I always stick to fundemanetally strong crytos with competent teams. The program offered 18% APR to validators, almost 2x than other cryptos. An individual can set up up to 200 nodes where the size of each node is 1,800 MNW tokens.

I stocked up my holding to 1,80,000 MNW tokens (traded on Kucoin and Uniswap) to set up 100 nodes. This means my total investment for becoming a Morpheus.Network masternode validator was $1,80,000. Secondly, I used my spare home PC to fulfill the hardware requirements and set up a server. So my investment on that part was literally zero. When the lock-up period recently got over, I got around $32,400 in rewards, i.e. 18% of my total investment. And by the time I cashed out my rewards, I could re-buy MNW again.

The most interesting part is that you can re-stake your tokens to set up nodes again after the lock-up period ends. So, while I was around working on my 9 to 5, my spare PC was validating transactions. Morpheus.Network was not the only masternode network I invested in.

During the same time, I also invested around $50k in DASH tokens to book around 7% APR. It was interesting to know that nearly 70% of total DASH coins are currently held by masternodes. Reassuring for the supporters that they are backing a solid project. It trades on Binance and other top exchanges.

Takeaway

The crypto market volatility could be highly challenging for beginners to navigate. However, passive income generation opportunities like masternodes open an alternative avenue for investors to make my while reducing their risks significantly. Also, unlike speculative trading, masternodes guarantee a fixed APR, which adds stability to your portfolio. Lastly, you don’t have to be glued to your screen 24/7 to understand charts and make money. You could be out partying, and your spare PC would be working for you. However, it is important not to consider this as the ultimate financial advice. Always do your own research about the project before investing.