First Crypto ETF: Why Mine Cryptocurrency When You Can Be a Masternode?
In most cryptocurrency systems, mining is the only way to earn new coins – aside from exchanging goods or services for coins, of course.
Dash coin, however, offers another option: becoming a masternode. Setting up a masternode is a relatively simple process, and people are starting to leverage these nodes in creative ways.
First Crypto ETF, the world’s first exchange-traded fund for cryptocurrencies, is taking an especially exciting approach. But first, let’s look into what masternodes are:
Mining Vs. the Masternode
In a nutshell, mining is the process of creating a blockchain. A blockchain is a public ledger that records all transactions in a cryptocurrency system, thereby ensuring that no shady dealings occur. The blockchain oversees everyone’s balance, preventing people from spending coins they don’t have.
Without getting too technical, mining works like so: Each “block” in the blockchain is a bundle of transactions. When a new transaction occurs, computers in the blockchain network create new “blocks” to add to the blockchain. Only one of these blocks can be added to the blockchain, so each computer that created a block also competes to solve a complicated math problem. The first computer that solves the problem wins the right to add the new block to the blockchain. Because creating blocks and solving math problems requires a not-insignificant amount of computing power, the winning computer is compensated with newly created coins – hence why the process is called “mining.”
While the users of bitcoin and many other cryptocurrencies can only mine, Dash coin holders have another option. They can also serve as masternodes.
Unlike most other cryptocurrencies, Dash relies on a two-tiered network. The first tier of the network is a standard blockchain, where computers mine Dash and create new blocks. The second tier of the network is composed of masternodes, which perform a few different functions.
First, masternodes verify the blockchain activity of the first network tier, thereby creating an even more secure blockchain. In the event that an improperly formed block makes it through the mining process, the masternodes will reject it.
Second, masternodes provide the anonymity that sets Dash apart from other cryptocurrencies. The blockchain may be a public ledger, but thanks to Dash’s masternodes, users can send and receive Dash coins anonymously.
Finally, the masternodes also provide the infrastructure necessary for Dash’s instant transactions service.
Because masternodes perform a valuable service for Dash users, they are also compensated for their work. In the Dash network, 45 percent of the block reward generated by each instance of mining goes to the masternodes.
Getting Creative With the Masternode
Masternodes are easy to establish. Anyone can do it as long as they meet two requirements:
- Have at least 1000 Dash in a wallet
- Establish a dedicated IP address for the masternode
In part because of this relatively low barrier to entry, many people and organizations are finding creative ways to use masternodes. One such example is First Crypto ETF.
First Crypto ETF offers a token that is actually a basket of 10 different cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Ethereum Classic, Lisk, Monero, Dash, and Zcash. First Crypto calls its portfolio “The Strategy Index.”
First Crypto ETF aims to make cryptocurrency more accessible to the average person, allowing people to purchase multiple currencies at once and track each one in a single, centralized location.
First Crypto ETF is also leveraging the Dash masternode system. The organization is establishing its own masternode, and it plans to redistribute the mining fees earned by the masternode to holders of First Crypto ETF tokens.
“The mining fees earned from the masternode are a great way to add additional value to the Strategy Index,” says Peter Vrábel, CEO of First Crypto ETF.
This is certainly an innovative approach to both cryptocurrency management and value-creation, and it will be exciting to watch First Crypto ETF launch this new aspect of its business model.
First Crypto ETF will also be participating in the upcoming Money20/20 Asia conference.
First Crypto ETF Press Release: http://bit.ly/2D7DZag
For more information on First Crypto ETF, visit www.firstcryptoetf.com.
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