Yesterday, VeChain released many bombshells on us ranging from global business forces in PwC and DNV GL joining the board, to a rebrand of VeChains blockchain, to VeChain Thor, all the way to the announcement that they will be adding Masternodes into the ecosystem! This release helped set the tone for what VeChain coined “apotheosis” on December 1st.
I wanted to take some time to help those that don’t understand what a masternode is and how VeChain has communicated they will apply it. This concept is HUGE and adds a substantial amount of value to us as token holders for locking in our funds early.
What is a Masternode?
The term masternode originated within the blockchain industry by the startup DASH. In the DASH ecosystem, a masternode is a computer (a.k.a. node) that runs DASH wallets aiding in the decision tree of the DASH blockchain consensus. The Masternodes within DASH help lock transactions with InstantSend, redistribute and assist in the mixing of coins, and voting on budget funding for the DASH community to use as they best see fit. The DASH consensus then rewards Masternodes for their contribution.
Within DASH ecosystem you must have a minimum of 1,000 DASH to participate as a masternode. When DASH announced Masternodes, in June of 2015, the going price per 1000 DASH was roughly $2,500-$3,000. Today, buying a DASH masternode will cost approximately $728,000. People appear attracted to the reward mechanisms placed upon Masternodes as not only will they return you more of the cryptocurrency at a % of your current holdings, but that same cryptocurrency can still increase in price.
Since the release of the DASH masternode, many coins have released their variant of the system. The overarching feature of Masternodes appears to be the locking of a minimum amount of coins, performing or gaining ability to do a particular task within the blockchain or ecosystem and receiving a reward.
What are VeChain Masternodes?
VeChain plans to offer two types of Masternodes in the Authority and Economic Masternodes.
Authority Masternodes are the only nodes that create blocks and ledger records, and as such are the most privileged members of the ecosystem. This privilege comes with an grave deal of responsibility in terms of computational power and commitment.
Economic Masternodes offer stability to the ecosystem and act as a distribution of power and privilege within the blockchain’s ecosystem by using their vote to influence the governance.
Both Authority and Economic Masternodes are eligible for one vote within the governance system. Each of node that holds at least 10,000 VET with a single public key will be considered to have ONE vote, and each stakeholder can have not more than ONE vote.
The VeChain Foundations new governance system requires a vote to elect new board members, changes to the blockchains consensus mechanisms, and any other subjects the board find crucial for the stakeholders to vote on.
How do I become a Masternode?
The hardest masternode to become is an Authority node. Even though Authority Masternodes are the highest rewarded, it is important to note that only 101 people will be selected to maintain one. Based on the team's description it sounds like basic computers will not be chosen and bordering on choosing server farms as a means of operation. The good news is that ANYONE can be an Economic node and that Economic Masternodes will not require much computing power at all. Here is how the breakdowns work:
- At 250,000 VET you can apply to be one of the 101 Authority MasterNodes, these are also called Thrudheim Masternodes.
- A minimum of 150,000 VET is required to become the highest rewarded Economy node known as Mjolnir Masternodes.
- From 50,000 - 149,999 VET you can qualify as a Thunder Node which will be rewarded less than a Mjolnir but higher than the following nodes.
- From 10,000-49,999 VET you qualify as a Strength node which is the lowest rewarded economy node but is still paid more than any non-node VET stake.
- Below 10,000 VET will allow you to receive a default reward that will be set by the Foundation. This will be the lowest reward possible but also requires nothing regarding commitment long term.
When does it start?
At 11:59PM UTC on December 20th, all the right things happen!
On this date, your VET needs to be in a trackable wallet (such as MEW) to begin accumulating seniority. Seniority just refers to how long you have been in the program, and it has future incentives not listed in their base model. Seniority also helps those hoping to become a Thrudheim Masternode as the Foundation communicated it is a must-have contributing factor in the initial selection of the 101 Authority Masternodes.
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