A special type of PoS reward wallet comes in the form of that which is a masternode.

These are wallets that have a locked balance in the form of the collateral requirements of the certain coin that can vary, for example:

DASH requires 1000 DASH coin to operate in a masternode capacity
Wagerr requires 25,000 WGR to operate in a masternode capacity
PIVX requires 10,000 PIVX to operate in a masternode capacity
Chaincoin requires 1000 CHC to operate in a masternode capacity
ionomy requires 20,000 ION to operate in a masternode capacity

Masternodes cost from a few up to many thousands of dollars of investment that is locked, yes locked for the duration of the masternodes functioning, meaning that those coins cannot be moved or spent from that wallets, by way of design and for very good reasons.

Masternodes help secure the network, confirming and relaying block transactions and can act as voting platforms for convergence of the network, for this and many other project dependent roles including adding privacy to transactions, they are rewarded with set amounts of coin – there is also the fact that the locked up collateral is not being dumped, sold on markets and exchanges so this adds a trust base, not only with the coin but also with it acting as a critical, to the network, tool.

If you decide to leave the masternode pool for any particular coin, it is just an act of stopping the masternode and unlocking the collator – you just cannot access the coins when the masternode is running and active.

The rewards for the masternodes taking part are entirely random

It is worth getting in early on good projects as the active masternode count will be low and so the rewards return will be more if you have a masternode or two set up and running from the start or early on – it is also sometimes worth mining coins with potential good projects to HODL then if it is worth it, go on to set up a masternode for recursive payments.*

You can, of course, run a masternode to support the network, if you believe in the longevity of the project from the start, it does not all need to be about sheer profit but an act of collecting and compounding coins, some use masternode collateral to set up subsequent with their rewards as the payouts can be that great.

*Masternodes require a specialized setup, normally the locked collateral is held within a local desktop QT wallet and the masternode workhorse is a remote daemon command line instance. You can rent server space at Vultr and Digital Ocean for a remote VPS for around $10 – $15 a month – this is where you need to work out if actually setting up a server is going to be profitable, even if it is at all possible to reach a ROI (Return On Investment).

There are many different masternode projects, some have good products and services, others are potential scams so you must do you due diligence in researching if a good project or not before investing even one cent or equivalent (mining activity included) in any cryptocurrency project.

There are some products called Sharenodes over at that allow you to invest in part shares of masternodes called Sharenodes, these allow for recursive income – you just buy the part-shares, sit back and reap (or reinvest) the rewards.

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