Have you ever staked your coins in the cryptocurrency wallet? Well, let us discuss here some basic points. Staking is the process by which you can hold your coins in the cryptocurrency wallet for a particular span of time, and after that, you can get rewards for confirming your transactions through staking.
It is used to support the operations of a blockchain network. It mostly includes many local cryptocurrencies in order to receive awards. In most cases, the concept of staking with cryptocurrency is closely linked to proof of stake or called PoS. Proof of stake is widely adopted by the networks that are using staking. The basic purpose of PoS in cryptocurrency is to validate and produce many new blockchains with the help of staking. The policy here is that the users that stake a larger amount of coins get a higher chance of being chosen as the next block validator.
Masternodes and Cryptocurrency
While dealing with staking and cryptocurrency, you may come across with several ways to get profit and earn passive income. In a crypto sphere, their several ways to invest your money and get profit and earn rewards. One of these best possible ways is the masternodes, but before going towards its detail, let’s what masternodes are? It is basically a full node or a cryptocurrency wallet where you can stake your coins. It is a full copy of the blockchain in real-time. But unlike it is quite different from all the other kinds of nodes, some of the basic functions that make it different from other kinds of nodes are given as follows:
- It can increase the privacy of transactions.
- You can do instant transactions with it.
- You can surely participate in governance and voting.
- The most important thing is that it enables budgeting and also the treasury system in crypto.
Proof of Stake in Cryptocurrency with Masternodes
When you are using cryptocurrencies, you should be aware of the fact that there are companies that have already developed such systems that can track your digital identities on the blockchain network. But all these tracking programs mostly work on the coins and tokens, and there is still one category that is associated with developing technological solutions in order to protect your privacy. One of these programs if proof of stake. It is a far better alternative than a proof of work. It allows the Telecoin network to become a pioneer in supporting the efficiency of mad performance in the crypto space. Another feature of it is that it is not only a source of getting passive income, but it also is a participant of the cryptocurrency networks.
Similarities Between the Power of Stake and Masternodes
Both the power of stake and masternodes have two features in common, which are to keep the network safe and secure and also staking coins in order to get passive income. The basic purpose of masternodes is not only to create new blocks, but it also has the ability to reject the blocks and to verify the transactions. In the case of Telecoin, masternodes is not only involved in the creation but also adding in the privacy regarding transactions.
Comparison Between Proof of Stake and Masternodes
As we know that in cryptocurrency, there are several methods of validating a blockchain, and mostly these methods have potential opportunities to earn rewards and maintain the security of the blockchain network. One of these methods is proof of stake here the users stake their coins in order to make a new block and also to get rewards. Proof of stake is the service where the user has required a particular amount of money or coins in order to create a masternodes, which will add an additional layer in providing security to the blockchain network. Earning awards from these sources is all dependent on the cryptocurrency’s consensus algorithm. With the help of these methods, the users these days are eased to earn rewards without any concern about security.