vps masternodes hosting servers
Owning a masternode is the third most popular way of being a part of the world of cryptocurrency, right after plain old “HODLing” and trading on an open market. In essence, it represents a form of passively holding cryptocurrency by running a wallet that is connected to its related blockchain network 24/7. Running a masternode carries significant responsibility and at the same time comes with some interesting perks requirements. Among those requirements we can include Virtual Private Servers (VPS) and we’ll be taking a closer look at those down below. But first, let us dissect what masternodes actually are.
What is a masternode?
As you can deduce from the name, a masternode is an advanced network node that is placed above regular nodes in the on-chain hierarchy. It contains the full copy of a project’s blockchain and is constantly in sync with the blockchain. And while both the regular and masternodes represent critical elements of one blockchain’s infrastructure, there are some differences between the two in terms of network responsibility and in terms of rewards they receive for the work they do.
A normal node acts mainly as support for network masternodes, focusing on receiving, storing and broadcasting transaction data. A masternode is the one responsible for actually “verifying” transactions by creating blocks out of transaction data relayed by normal nodes and adding these blocks to the blockchain. Additionally, a masternode often times has further responsibilities on the network, most crucial one being their role in maintaining the blockchain security. As we said before, a masternode contains the full copy of the blockchain. Theoretically, all you need to have an operational blockchain is one such node. But running a blockchain on a single node would make the network very weak to centralized points of failure like power outages, hardware issues or blockchain data corruption/altering. This is why it’s important to have a large number of masternodes on the network; the more masternodes there are, the safer the blockchain is.
Finally masternodes can sometimes come with other duties, including on-chain voting, execution of blockchain upgrades, management of blockchain treasuries, and enforcement of blockchain rules. Their increased importance to the network is usually rewarded by giving the masternode tokens or coins with each new block that is added to the blockchain and by paying them interest. That being said, running a masternode isn’t an easy task and its owner will need to invest a significant amount of funds and time into the ordeal.
Requirements to run a masternode
First of all, not everyone can enjoy the privilege of hosting a masternode. As this is an extremely responsible position to hold, it is very important that masternode operator is someone who has a genuine interest in the blockchain staying safe and prosperous. As such, blockchains require that each masternode operator owns a very large sum of cryptocurrency (usually the cryptocurrency he’s applying to manage the blockchain of).
This “bag” serves as insurance that the node will remain honest and dedicated “to the cause”; if it starts behaving malicious, operator’s own holdings will suffer as well. Different blockchains will naturally demand different amounts of cryptocurrency to be held by their masternodes. For example Dash requires 1,000 coins, SysCoin requires 100,000 coins and PIVX requires 10,000 coins. This bag can also play a role in blockchain governance and voting, as masternodes that have a bigger “stake” of crypto in their wallet get proportionately bigger vote in on-chain matters (masternodes and proof-of-stake are two different systems but that’s a story for a different time).
After securing your cryptocurrency bag, you’ll need to consider what kind of hardware you want to be running your masternode on. The hardware required to run a masternode isn’t that outlandish as 2 core, 2 GB of RAM devices will do just fine. You’ll probably spend most of your hardware budget on storage space and a quality internet connection. Finally, to ensure that your masternode runs in a stable, efficient manner at all times, it is recommended that you set up a Virtual Private Server.
About Virtual Private Servers
A VPS is a Virtual Private Server, or virtual machine, provided by web hosting companies all over the Internet. It is a server running within a server; a VPS is hosted by a “normal” physical server. One physical server can host multiple virtual servers which can run and be maintained independently from one another. A VPS runs on an operating system which has root access enabled, allowing the node operator to fine tune the device to his and his blockchain of choice’s needs.
A VPS enables the masternode to stay online 24/7 and provide constant support to the blockchain, creating a stable, fluid infrastructure for the network to exist on. Additionally a VPS creates a static IP address for the masternode which is crucial for several reasons, most important one being that it allows the masternode to easily retain its network payments. A virtual server has an advantage over a physical one as it’s a much cheaper option to run and maintain for the masternode owner. Finally, a VPS masks said static IP address, protecting the masternode funds and other data that may be stored on it.
All of the above means that running your masternode with the help of a Virtual Private Server is the way to go. Each masternode will require a different VPS Let’s take a look at a couple of the best ones currently available on the market.