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MASTER NODES
Masternodes are one-half of the Proof of Work blockchains such as Bitcoin, Litecoin, FLUX, etcetera. Proof of Work Blockchains also incorporate digital currency mining to run, store & host their blockchain infrastructure.
VALIDATOR NODES
Validator nodes are the entirety of the “Proof of Stake” blockchains such as Ethereum, Avalanche, Binance Smart Chain, Fantom Opera Network, etcetera. This means there is NO MINING on Validation Chains like Ethereum.
DIGITAL CURRENCY MINING
Unlike validation chains, “proof of work” chains like BTC & FLUX have miners that algorithmically solve encrypted blocks of transactions, sending the data to the masternodes for storage of the chain.
Blockchain Infrastructure
MASTER NODES
What Is A MasterNode?
Masternodes are one half of the Proof of Work blockchains such as, Bitcoin, Litecoin, FLUX, etcetera.
Unlike regular nodes, master nodes do not add new blocks of transactions to the blockchain. Instead, they store the data of new blocks that verified by the miners and perform special roles in governance.
One of the major roles of a masternode is to store every block, piece of data, & blockchain transaction all the way back to the very first block & transaction on the specific blockchain, on the masternode operator’s own private servers.
Why Do MasterNodes Matter?
There are hundreds, if not thousands, of masternodes supporting any given blockchain network. This is how the blockchains stay operational 24 hours a day, and rarely have network outages, while also keeping the blockchain decentralized and secure.
Masternodes are what make the blockchain trackable. Since every masternode houses all data from that blockchain from the blockchain’s inception, if that node were to ever disconnect from the network there are always other nodes running & storing the blockchain data.
Masternodes often require expensive collateral and server memory to host. The masternode operator collateralizes their blockchain coin asset, runs/hosts the masternode on their own servers that meet the specific hardware requirements, store the data, and are then rewarded for hosting the blockchain. Most masternodes’ coin collateral requirements are the same for every masternode on the network.
What Is The Reward?
Predominantly, there is a 50/50 split between miners that algorithmically solve the blocks, and the masternodes that store them.
Masternodes are rewarded in the blockchain native coin as long as they are connected to & hosting the network. They are essentially paid a part of the “fees” (or gas) blockchain transactions bring in (usually 50%) from users that are sending coins/tokens on the network.
VALIDATOR NODES
What Is A Validator Node?
Validator nodes are the entirety of the “Proof of Stake” blockchains such as Ethereum, Avalanche, Binance Smart Chain, etcetera. This means there is NO MINING on Validation Chains like Ethereum.
Validators do not algorithmically solve new blocks of transactions via mining. Instead, they validate new blocks, store the blockchain data, vote on proposals on the network, and validate transactions like a traditional miner would.
One of the major roles of a validator node is to store every block, piece of data, & blockchain transaction all the way back to the very first block & transaction on the specific blockchain, on the validator operator’s own private servers.
Why Do Validator Nodes Matter?
There are dozens (and sometimes hundreds, if not thousands) of validator nodes supporting any given Proof of Stake network. This is how the blockchains stay operational 24 hours a day, and rarely have network outages.
These Validator nodes are what make the blockchain trackable and decentralized, and actually authenticate all of its transactions.
Since every validator node houses all data from that blockchain from the blockchain’s inception, if that validator were to ever disconnect from the network there are always other nodes running & storing the blockchain data.
Validator nodes have a minimum coin collateral requirement, usually very expensive (for example: AVAX is 2,000 coins, ETH is 32 coins, FTM is 500,000 coins), and certain high level server memory requirements to host.
The validator node operator collateralizes their blockchain coin asset, runs the validation program on their own servers that meet the specific hardware requirements, validates blocks that decrypt the transactions, stores the data, and then are rewarded for hosting & validating the blockchain via their share of the “gas” fees on the chain.
What Is The Reward?
Predominantly, validators generate anywhere from 5% to 20% APR (without taking into account price appreciation) for validating the transaction blocks and storing the data.
Some validators have more fluid APRs that are dependent upon the size of their stake compared to the other validators, their reputation of validation (whether or not they missed any attestations), their validator “network up-time”, their staked period (how long their coins are staked & locked for), among other factors.
Validator nodes are rewarded in the blockchain native coin as long as they are connected to & hosting the network during their specific attestation periods for every epoch that is delegated to them.
Put simply, they are paid a portion of the “gas fees” that blockchain transactions bring in from users that are sending coins/tokens on the network the operator is helping host. The more transactions on the chain, the higher the reward for validation.
DIGITAL CURRENCY MINING
What Is Digital Currency Mining?
Mining (or “Miners”) are the second half of the Proof of Work blockchains such as, Bitcoin, Litecoin, FLUX, etcetera.
Unlike validation chains, “proof of work” chains have miners that add new blocks of transactions to the blockchain that they have algorithmically solved the encryption of. Once they are mined and verified, those blocks are sent to the masternodes to be stored on the masternode servers.
The key role of the miners is to solve, or decrypt, every block, piece of data, & blockchain transaction in order to send it to be stored on the blockchain.
This is a very complex expensive algorithmic process that requires tremendous computing power that most stand-alone servers do not possess.
Why Do Miners Matter?
There are thousands, if not millions, of miners supporting any given blockchain network. This is how the blockchains stay operational 24 hours a day, and rarely have network outages, while also keeping the blockchain decentralized and secure.
Miners are what make the blockchain trackable. They literally decrypt all transaction data so that it can be verified and sent to masternodes to be stored.
Miners do not require collateral but require a massive amount of computing power to run the mining operations and program, which is very expensive.
Specific mining “rigs” are purchased with the computing power already built into them and require massive amounts of power as well as a strong internet connection. This is capital and labor intense, but without miners “Proof of Work” chains cannot exist.
What Is The Reward?
Predominantly, there is a 50/50 split between miners that algorithmically solve the blocks, and the masternodes that store them.
Miners are rewarded in the blockchain native coin as long as they are connected to & solving transaction blocks on the network.
They are essentially paid a part of the “gas fees” that blockchain transactions bring in (usually 50%) from users that are sending coins/tokens on the network the operator is helping host.