When venturing into the world of masternode-capable currencies, there are some interesting pieces of “slang” to pick up. It is not uncommon for industries to create their own language, and cryptocurrency is no different in this regard. The following key terms are necessary knowledge to properly engage in masternode conversations and research.
The Masternode Industry Jargon List
Masternode: A cryptocurrency network node performing specific ecosystem-wide tasks. For most cryptocurrencies, masternodes provide the backbone to conduct private or anonymous transactions. In some cases, these nodes will also unlock extra features.
Collateral: The funds necessary to run a masternode linked to a specific cryptocurrency. The term “collateral” is aptly chosen, as this funds needs to be remain linked to a public wallet address for the duration of operating the masternode in question.
ROI: An acronym which means Return on investment. There is some controversy as to applying the term ROI to masternodes, primarily because users never “lose” their initial investment unless the coin’s price plummets drastically. Even so, the term has merit, as it indicates how long it will take for investors to earn the same amount of coins as their masternode’s collateral requires.
Rewards: Every owner of a cryptocurrency masternode will receive periodic rewards for locking up a specific collateral for that particular network. These rewards are always denominated in the network’s native currency and can be sold, traded, or in some cases, used for proof-of-stake. These rewards also contribute to the node’s ROI time.
Public Key/PubKey: The address associated with a cryptocurrency network which is visible for everyone to see. By knowing someone’s public key, users can see if that specific masternode is still running, or whether its owner has sold his coins and moved on to a new project. It is also a useful way of checking in the block explorer when the next reward should be coming in.
Genkey: A unique identifier associated with a masternode’s specific server or IP address. Users can generate a genkey from their coin’s wallet, and this information cannot be reused for multiple masternodes. It is also this genkey which is linked to the public address receiving the periodic rewards.
Status: As the name suggests, the status of a masternodes indicates if the service is enabled, missing, or otherwise. An “Enabled” status means everything is running as expected, whereas “Missing” would indicate the node needs to be restarted accordingly.
Last Seen: In the cryptocurrency wallet, the user will see a window titled “Last Seen” in their Masternodes overview. This indicates the last time the network checked and confirmed the masternode was properly connected and performing its duties. It is not uncommon for this “timer” to show a 50-minute gap in between network “pings”, as the connection is not tested every single minute.
VPS: Most users rely on a VPS, or Virtual Private Server, to keep their masternode active when their home computer is turned off. A VPS requires a monthly fee to operate, but it is often preferable compared to leaving one’s computer on day and night due to electricity costs and so forth.
Shared Masternode: Not every investor wants to cough up the entire collateral in one go. Thankfully, there are shared masternode service providers. Through such services, users can pay a part of the required masternode collateral in the form of “masternode shares”. In doing so, they will receive a portion of the rewards based on how many shares they have for that specific node.
Alias: It is always advised to give every individual masternode a unique name. Some users will name their node “Mynode’ whereas others have an entire list of network nodes designated by digits or letters. An Alias makes it slightly easier to see where transactions are coming from and why they are sent to that specific address. A very useful feature when controlling multiple nodes from the same wallet.