The Fight Over Masternodes: The WTF New Way to Earn Money With Crypto

While the term is flexible, generally speaking, masternodes are defined as computers on a network - staked with tokens - that perform additional work besides just helping run the software that governs a given cryptocurrency.

The mechanism, while an older idea, is starting to gain some traction with significant projects such as ZenCash, Gold Poker and Zcoin using the masternodes.

At its heart, the months-long contest pits pairs of tokens that use masternodes up against each other to test sentiment and name recognition, all using fairly simple, straightforward SurveyMonkey dialogues.

According to industry observers, including Colwell, the masternodes approach allows participants in the network to earn income that's above and beyond token appreciation.

Usually, masternodes have very high rewards in their native token, in order to make up for their market volatility.

If a masternode offers 10 percent rewards on a stake of 100 tokens, a user should get 10 new tokens annually.

In addition to validating transactions, Swarm's masternodes will decide where to invest part of Swarm's token reserve.

Deciding who else gets to be a masternode on the Eximchain network is one of the most important pieces of work its masternodes will do.

Just as money makes masternodes an enticing idea, for masternode projects themselves, Colwell's contest is starting to look more attractive, too.

The startup was created to give users a way to run masternodes without actually needing to manage the computing themselves.