From the inception of the blockchain technology until now, so many improvements have been made to the technology. Bitcoin, for example, is the first “1st Generation” blockchain that was created, and it brought about a new scope to the world’s financial industry. However, others like Ethereum, Litecoin, and Dash have featured qualities that are lacking in the bitcoin blockchain.
One of such features is the masternode. This is an innovative second tier network of servers who have a real-time, full copy of the blockchain. Masternodes allow governance, speed, effectiveness and special transactions on the blockchain. On conventional blockchains which feature only nodes, there can hardly be any improvement made. This will be a big problem if such a blockchain isn’t scalable.
What Do We Expect of the Blockchain Masternode?
The blockchain masternode promises many things to the world of digital currencies. Some of the things that the masternode would help to achieve include the following:
Decentralization
Contrary to what many may opine, the blockchain masternode is a decentralized network of servers. How is this possible, you ask? Any user can own a masternode. There are no specially selected nodes who occupy this position; however, there are certain criterias that must be met run a masternode.
Governance
The reason many blockchains like bitcoin are non-scalable is the lack of governance on it. This would mean that the blockchain will only run on an already existing program, and it will not be improvable. Masternodes in Dash for instance are given the privilege to vote in decision-making processes that pertain to a particular blockchain. This is also decentralized because any user can be a masternode, and can participate in the decision-making vote process.
Instant Transactions
This is another feature that is expected of the masternode servers. These can overrule the “several minutes” it takes to verify a block – which essentially determines the transaction time. The masternodes have a real-time, full copy of the blockchain, and they can verify transactions within seconds. On the Dash blockchain, this feature is called InstantSend.
Real-life Examples and Applications of Masternodes
Masternode is not just idealistic like the ideal gas law in Chemistry, but it is a reality as well as a key factor to the massive adoption of cryptocurrencies all over the world. Some examples of blockchain networks that feature masternodes are Dash, PIVX, BLOCK, and ZCoin. PIVX is a fork of Dash.
With masternodes, Dash has been able to record transactions which are as low as 1.3 seconds, offer complete financial privacy, and conduct decentralized governance on its blockchain.
Dash’s masternode features which are InstantSend, PrivateSend, and Governance on the blockchain have placed it on a high pedestal. It’s experiencing a major adoption with about 5,000 merchants accepting Dash globally. It also maintains presence in African countries including Nigeria, South Africa, Ghana, and Zimbabwe, being integrated on platforms like GigaLayer, a web hosting service in Africa, qualymart.ng an ecommerce site, and several others.
Besides the functionality of the masternodes, there are also rewards for running a masternode. September 2nd, last year, an article published by Coindeskshowed that masternode is a new “what the fuck!” way to earn money. Although this is not all there is to the masternode, incentives are given to masternode users for depositing large amounts of coins in order to run a masternode.
Masternodes are not merely idealistic but are equally capable of making financial transactions to the young, the old, the educated, the illiterate, the rich, and so on, to be as simple as the traditional banking systems we have. Though in this case, users are their own banks since it offers a decentralized money servicing system.
This is an opinion piece by Nathaniel Luz, a blockchain enthusiast and he tweets @nathaniel_luz
