I have issues with masternode coins. They can be an awesome investment as you get a % return on the coins you hold. My problem is kind of complicated to explain but I will give it a try...
Take DASH for example. Dash rewards 45% (I think... could be wrong) of the new coins created to the masternode holders. In turn, the miners are mining for 45% of the rewards. If you follow whattomine or coinwarz (.com for both), you can see which coins are the most profitable to mine. Yesterday, I saw DASH flirting with a negative balance. What happens to a coin if it becomes unprofitable to mine? My guess is that people will stop mining it. I would also assume that as miners take their hardware offline, the value of their hardware will also go down. People have been buying D3's (Dash miners from Bitmain) for next to nothing on Ebay.
If you look at Bitcoin or Litecoin, both 100% POW coins that reward miners 100%. They are currently paying miners around $5 a day. Not good, but worth plugging a machine in. If there was no masternode reward on DASH, it would be paying miners the same(ish) as Litecoin and Bitcoin. The masternode system has some positives, but when mining gets tight, the first coin to fail would be DASH (in my opinion).
The network will find an equalibrium of course. As miners go offline, the profitability will go up slightly to compensate. But if a bear market continues, the DASH network will continually weaken due to miners going offline whereas LTC, BTC etc. will still be mining full bore.
There are a lot of masternode coins that are fully proof of stake, and the stake increases if you are holding a certain amount (masternode). These coins would not have the same issues as DASH or MUE as they are not reliant on proof of work as well. I still do have trouble seeing a coin that is rewarding the rich few surviving long term. I see crypto as a response to a system that is not working (where the money all goes to the rich few.) The masternode is the same system in crypto form. I have trouble seeing the 5 coins (or 50) that are left standing after the bubble bursts being masternode coins. Maybe a few (but do your homework). This of course is just my opinion on it... but I am in this for the long term and am trying to not let a few percent increase in stake a year blind me from the reality that a lot of these coins are going to go belly up. I want to be holding the ones that are still standing.
I hope that at least got you thinking about it... this is just an opinion. IF I had a DASH masternode, I would have made a killing last year. But if I held it for five more years??? Who knows?
Im extremely grateful for your reply.
Also I wonder how many of miners would continue mining knowing that their operation isnt very profitable. I know few who are having similar approach to investors = HODL.
They told me that they will keep mining crypto that they chosed because they invested long term. So there is very little difference between them and HODLers.
Ive been thinking more and more about masternodes and so far most coins that offer masternosed are not very convincing. It's hard to find any that really serve any purpose at all.
It is a flashy buy in because there is a promised return... the coin needs to stay valuable for it to be worth anything though. My best bet is to find the blockchains that you are excited about and that you think will change the world for the better and put your support behind them. Invest in them. Write about them... because when you are writing about them, you are writing about something you believe in, and if you invested in it and are writing about it, you are not just advertising some crap to make money, you are writing about and are invested in something you believe will make the world a better place.
Mining is just a bet that you can spend money on hardware and end up making more back. It is a long term investment and many of them are for sure HODLers.
I absolutely agree. Mining is more of a gamble. I decided to invest in steemit as I believe that here I have at least some sort of control over my own future.
Thx for amazing comment
Steem is where most of my crypto holdings are... but I really like EOS. I think it will be paradigm shifting.
No problem. Thanks for reading! I gotta find time to write some more here. Maybe this weekend I can get another post in.
Im not very familiar with EOS. I know that it is a blockchain platform. Something competitive to ETH, NEO or AKA. And I've heard that it can have a great future and some people compare it even to seem but not really sure why.
i really wish we could keep in touch via email
ps.
do you mind telling me what is your view on auto-voting? Just curious
EOS is designed by the same developer who developed steem. It is steem 2.0 (and Bitshares 3.0)
Auto voting is a can of worms. People have all sorts of different ethical stances on it. When to, when to not... never ever or always and no problem. I feel this is a super free platform and you are free to do what you will. You do have to face the consequences of your actions as there are many that base their interactions with you on how you behave. If you like a writer and feel that they put something good out consistent, I see an auto vote as good. I have sold my vote in the past and had my vote found on some really trashy vote farming pages. That upset me. (I did get paid decently for selling the upvote though)... I pulled away from that after I found out how bad things can be abused. I like steem and want to see it flourish, so these days I try to keep that as my guiding principle. I emailed you yesterday.
Thank you for your kind reply.
Im very interested with that topic.
I hope you dont mind if I ask you few more questions. Via email already :)
I just read your message like 3rd time :)
Would you mind sharing with us which masternode coins would you consider "stable"? dash and pivx seem to be the most commonly mentioned around. Also smartcash seem to be quite reliable.