MasterNodes: What you Need to Know to Make Passive Income

Last updated: Mar 30, 2023
8 Min Read
AI Generated Summary

There is nothing quite as in demand as an investment that will pay you out a regular stream of income. Be it through dividends, interest or some other means, the notion of predictable earnings is greatly alluring.

Until the concept of masternode hosting was first introduced, making money through cryptocurrencies required holding the asset itself and hoping for a price appreciation. While possibly lucrative, it was also quite risky given that the price could fall.

IQ Option Trade Credit Card  

However, with masternode hosting, regular cryptocurrency returns that are relatively stable are now a reality. If you are not entirely clear about what a masternode is, we will bring you up to speed in this comprehensive post.

What is a MasterNode

Image Source: Slideshare

A masternode is basically a server on a decentralised network. This masternode will complete actions that are not usually possible with the other nodes on the network. These could be features such as direct transactions or private transactions.

These masternodes can be relatively complex and expensive to run and hence, are not always open to the usual node operators. However, they are rewarded for operating the masternode by a percentage of the block reward. These pay-out times will differ according to the cryptocurrency in question.

The main benefit of the masternode option is that those who operate them are able to earn cryptocurrencies on an ongoing basis without having to get involved in actually mining the coins. Although setting up a masternode can be expensive, it is much easier than having to set up mining rigs.

The "cost" to run a masternode is essentially just staking a large holding of coins on the network which would give the operator the status of the masternode. Although this can be quite a sizable number, they staked and the operator can always extract and sell them if he wants.

Many may think that this sounds a great deal like a Proof-of-Stake (POS) coin where one earns an income based on a certain amount of holdings. Although both allow you to earn crytpo regularly, masternodes are also used with Proof-of-Work (PoW) coins.

So you may now be interested to stake your own coins and set up a masternode. What is most important though is how profitable this is likely to be for you.

What Can a Masternode Operator Earn?

There are a number of factors that will impact on your earnings as a masternode. These include the particular coin that is chosen, the price increase in that coin and the particular protocol.

The masternode will require the operator to take a look around and find the coins that are offering the most potential monthly ROI. However, one of the most important parts of that equation is the expected appreciation of the coin price.

Due to the fact that you are staking these coins, you are still exposed to the price increase in your holdings. Moreover, given that you are earning your returns in the crypto coin itself, the fiat return on your investment is also variable.

This means that although one will no doubt operate a masternode based on the potential fixed ROI, they would also need to consider their view of the price projections. Coins that have the most potential for this could offer a greater return to the masternode in the long run.

Choosing the Right Coins

With that being said, if you wanted to find out which coins offer the most attractive returns currently for the masternode, you could take a look at a comparison site such as masternodes Pro. Below is screenshot of the most profitable coins at the time of writing. Website Screenshot
Image Source:

As you can see, the NUMUS (NMS) coin has the highest return than one can earn. If we were to take a closer look into the advanced statistics of the coin we would see exactly what it would cost us as well as our returns.

As you can see, in order to operate this masternode you would need to hold 5,000 NMS tokens. At current market prices that is about $32,539. With these 5,000 NMS staked, you would earn 82 NMS daily which translates into $534 daily income.

NUMUS Coin Returns Masternode
Image Source:

You can therefore see why the annual return for this coin is so high. Although this does indeed seem attractive, you will have to take a view on the direction of NUMUS over the next year. The coin seems quite unreliable with really thin volumes as shown on Coinmarketcap.

Masternode Coins to Consider

Although the lower market cap coins may offer you highly attractive returns, they are much less stable and hence not as reliable as one of the more established coins on the market.


There is one masternode which is currently in the top 20 coins and that is Dash. This makes it one of the most popular coins to operate as a masternode. The operations of the masternode in Dash are those which include "PrivateSend" and "InstantSend".

However, given the demand, running a masternode on Dash is one of the most expensive with 1,000 Dash required to be staked. This is about $600,000 at press time. This also makes the ROI over the year rather small at only 7% currently.

This comes with the benefit though, of being able to make important governance decisions when voting on updates on the Dash network. These masternodes have the ability to shape development going forward.

If you were interested in more information on how to get involved with a Dash masternode then you could visit the official website.


VEChain is a blockchain solution that wants to solve the problem of global fakes and counterfeit goods. They want to track the supply chain such that the origins of the goods in question can be confirmed right back to the trusted manufacturer.

This can be used as a supply chain tracking solution for a number of products including agriculture and luxury goods. They want to build a trust free and distributed ecosystem for business to confirm the authenticity of claims.

The cost of running a masternode on VEChain is currently 10,000 VEN tokens which is about $42,000.


The PIVX privacy coin is another interesting cryptocurrency that you may want to consider running a masternode for. This project is unique in that it is one of the only privacy coins that operate a POS consensus algorithm.

The PIVX Coin will make use of the masternode in order to speed up their transaction speeds as well as make the privacy featured more secure. It is also really interesting in that the reward is not static and will be decided by the network.

If you wanted to operate a PIVX masternode, you would need to stake 10,000 PIVX tokens which at current prices is about $56,000. Although quite pricey, this also has the benefit of governance decisions being voted on by the masternodes.

If you wanted to operate a PIVX masternode you would need 24 hour uptime on your servers as well as a dedicated IP address. There is a great deal more information on the PIVX masternodes on their website.

Running a MasterNode

Now that you have an idea of how a masternode works, you may be interested in hosting your own one. Yet, how exactly would you go about this?

Setting up your own masternode can be quite a complex procedure that would require some familiarity with Linux shell commands. This is required in order to set up the client software on the machines.

If this is something that you do not feel completely comfortable with then there are other easier options. One of them is to make use of third party hosting services. These will however, require monthly expenses which could eat into your return.

Whichever route you do take, running a masternode can be an attractive alternative to just holding your coins. It will give that added benefit of your money working for you and providing you with cryptocoins while you sleep.

Editorial Team

The Coin Bureau Editorial Team are your dedicated guides through the dynamic world of cryptocurrency. With a passion for educating the masses on blockchain technology and a commitment to unbiased, shill-free content, we unravel the complexities of the industry through in-depth research. We aim to empower the crypto community with the knowledge needed to navigate the crypto landscape successfully and safely, equipping our community with the knowledge and understanding they need to navigate this new digital frontier. 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Previous article
What is ByteBall? The Cryptocurrency With No Blockchain
next article
Simple Guide to Ethereum Classic vs. Ethereum: What's the Difference?