Investing in cryptocurrencies has become quite a sensation in recent years. Cryptoassets, compared to standard form of FIAT investing options are offering increased profit. To invest in crypto, you don't have to a seasonal investor or pro trader. Expert or beginner there is no difference - and with brief introduction to cryptoworld anyone can buy, hold and invest into Bitcoin or portfolio of promising altcoins. However, crypto investments are not free of risk, and like every form of stndard investing - it's not easy and sure way to always profit, no matter what. Today I would like to introduce you do Masternode investing. I won't explain what maternodes are. You can read a detailed explanation here: What are Masternodes?
To have your own masternode, all you need to do is to save a number of coins - these coins will become your collateral. The amount of money you need to front the financing of your desired MN may vary. But in profits from a Masternode can be more beneficial in the long run than simple PoS staking. You'll have to remember that the ROI of your investment can be very diverse and depends on the coin of your choice.
As we know, there are thousands of altcoins in active development. Ideally, you will have to do your own due diligence to find out which coin has the best potential to succeed. If you want to learn a bit more on how to choose promising altcoin to invest into, here is a short guide for you: How to tell if an altcoin has the potential to grow?
1. ROI generated from your MN investment
Firstly, you may calculate how much ROI you will get from the results of this Masternode staking. It's probably the most important point to consider when choosing MN to invest to. I know that it's not easy to calculate PoS staking, or masternode staking, especially in the ever changing and volatile crypto environment. Please note that even if some Masternodes you are interested in have currently mediocre RoI, if we aim for long run investment, and the prospect of the coin is promising, it might be a good option to invest in such coin.
2. The purpose of the coin you will choose
New coins might not have any real use yet, and beside promises of greatness, we don't have many real-life indicators to evaluate these coins. How do we learn a true value of these coins then? It's simple - we do the research. If the whitepaper and roadmap the presented by the developers are promising, unique and possible to develop in feasible future - we may assume that the coin will do just fine.
3. Project risks
Don't get carried away by the promises of a high ROI. First, you will need to understand understand the project. When you find a promising altcoin, you may want to compare this project to other altcoins which are offering similar prospects. If, the risk of this project seems higher that others, then you need to be extra cautious, and potentially look for other projects that provide similar opportunities but at the same offer lower risk.
4. Project community
The community of a project can be a sign of the quality of the project itself. If you want a quality project - first of all check all coins backed by large communities. When coin is backed by many people - it's popular and the risk of investing in the unknown project is diminished. Please note, that in the past even coins backed by thousands of followers turned out to be failed experiments. To learn if coin is popular you may research on social media accounts - check: Twitter, Facebook, Instagram, Telegram chat application or Bitcointalk.org forum. This simple research can tell you if the coin you are interested in is right for Masternode staking.
5. Developer responsibility
If you find a project that promises everyone a great ROI for stakers. Double-check what developers are in store for coin users. If developers don't have any long-distance plans ready or they are always delaying crucial updates, or perhaps there are no new features, no marketing plans and there is no general progress of coin adoption at all. Then it's wise to think about investing in such project, because in the long run there is a high chance that this won't change.
6. Conclusion of research results
I will repeat once more - research is the key when choosing a promising altcoin for staking or masternode staking. When you have finished doing research, don't stop following information of the coin you've invested in. Crypto trading, staking and overall ecosystem are highly volatile, one news can change the rules of the game. If you want to always be on top, it's wise to always be familiar with recent news, developments and current crypto markets sentiment.
Happy staking!
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