Stratis Masternodes Alpha

What is a Masternode?

A masternode can be viewed as a special type of server that is consistently maintained by computers (ultimately run by a user). Masternodes are decentralized and provide different types of services to help a blockchain ecosystem. The concept of a masternode was developed by Dash and has been a very important working concept to keep a proof-of-stake (PoS) cryptocurrency ecosystem healthy.

The idea and implementation of masternodes has been a vital part in mainly PoS setups where these masternodes can leave a certain number of coins aside as collateral to earn mining rewards. When mining a PoW cryptocurrency such as Bitcoin, there is a high level of centralization due to the increasing difficulty of mining the coin, which necessitates very expensive hardware. This hardware is normally purchased by top players and mining corporations with a lot of money to fund their mining operations.

Every masternode on the blockchain network provides a certain type of service while ensuring there is no centralized figure to attack and corrupt the network. Masternodes guarantee that transactions are validated and confirmed in real time, which makes them highly efficient for the blockchain network and ecosystem. The financial rewards provided through setting up and operating a masternode has allowed more parties to be involved with the cryptocurrency, thus making a shift towards a more decentralized approach.

Stratis Masternodes

Stratis masternodes were introduced by the team to benefit both STRAT token holders and the Stratis ecosystem. These masternodes serve many useful purposes by establishing a trustless and decentralized system within the blockchain network.

As the Stratis masternodes alpha release made its way to the public on October 30, 2017, the initial service that these masternodes provides is the Breeze Privacy protocol known as TumbleBit. These masternodes will help tumble coins in BTC transactions to anonymise these transactions when using the Breeze wallet.

The initial requirements to host a masternode (when it is on the mainnet and available to run) is to hold 250,000 STRAT tokens as collateral. This number may seem high, but it is not a number that is set by the Stratis team; rather it is dictated by the system to keep the network secure and running without issues. This also incentivizes holders of 250,000 STRAT to continue holding, which ultimately decreases the available supply.

According to the Stratis team:

There’s going to be several master nodes in the future that provide functionality across the Stratis Platform, and our goal is to have a node tier for every level of holders, so that even people who have a 1,000 Stratis, 10,000 Stratis or 100,000 Stratis can run a node as well.

At the time of writing, the Stratis masternodes alpha release includes the following:

A live Masternode running on Microsoft Azure.
Full support for the new Service Discovery Protocol and are currently configured to run the Breeze Privacy Protocol service.
A new version of the Breeze Wallet with Breeze Privacy Protocol (powered by TumbleBit) that features the Masternode Client Discovery Protocol.
A collateral verification feature that requires the node operator to provide 250,000 Strat to be held in a watched address on the blockchain. This requirement helps to incentivize the supply of appropriate resources required to operate the network in an efficient and secure manner.

Requirements to Host a Stratis Masternode (When Running on the Main Network)

There are certain requirements to host the Stratis masternode for Breeze when it makes its way to the mainnet for its public users to utilize.

Detailed below are the main requirements:

The node operator must possess 250,000 STRAT at the minimum. This means the operator must hold the private key associated with the balance.
This 250,000 STRAT minimum balance must exist in a single Stratis address and not spread out between multiple addresses.
Moving the 250,000 STRAT minimum balance (collateral) to a different address from the original address holding the amount invalidates proof of possessing the balance prior to the move.

Benefits of Investing in a Masternode

Masternodes ensure the long term viability of the project which guarantees that the focus of the project isn’t on a simple pump and dump scheme.
Owners of a masternode consist of investors that are highly interested with the success of said cryptocurrency. This gives them incentive to spread the word about the upcoming milestones and future success of the project with long-term interest in mind.
Masternodes are able to host a slew of services that can benefit a decentralized system. In the case of Stratis, an example is TumbleBit (which is able to anonymize and tumble BTC transactions instead of using a centralized mixer). Other services are likely to be added in the near future which makes the possible use cases for a masternode endless.
A non-technical user can own a masternode and earn financial compensation for using their tokens as collateral. They don’t need to purchase any hardware equipment, just the tokens themselves and they can get started right away with hosting their own node.
The owner of the STRAT tokens is the sole owner of the masternode. There is no 3rd party holding your funds, which implies that the system is completely trustless.
Finally, the owner of the masternode generates revenue by locking up the minimum number of tokens (250,000 STRAT for TumbleBit functionality) as collateral. These passive gains allow the owners of the masternodes to earn financial compensation while benefitting the network by providing services that keep the ecosystem healthy and running.

Conclusion

The introduction of masternodes in the cryptocurrency space has allowed token holders to be able to earn financial compensation for providing services that power the blockchain they run on. It is a strong incentive to attract early investors (pre-ICO and ICO) as the price of a STRAT token was around ~$0.007.

The release of the masternodes alpha for the Breeze Privacy protocol has laid a stepping stone which will soon turn into the beta version running on the mainnet. Stratis investors that hold a minimum of 250,000 STRAT will be able to host and run a masternode on the network to provide tumbling functionality for users making use of the service. Putting up the 250,000 STRAT as collateral and running a masternode allows the owner of the masternode to earn a substantially profitable revenue.

With Stratis releasing masternode alpha functionality for Breeze, the team looks to pave the path to providing more services that benefit both the investor and users of TumbleBit. Not only is Stratis aiming to become a one-stop shop for a blockchain-as-a-service product, but they aim to provide further functionalities such as smart contracts, sidechains, masternodes, and a wallet to tumble coins. The Stratis team has been on track with keeping up with their ambitious roadmap as they continue to develop technology that will revolutionize the world.

Tags: Stratis