The Benefits of Node Investing in A Down Market

Passive investors long for a cryptocurrency price rise so they can “cash out” their investments. Unfortunately, this investing strategy requires waiting out a down market. An alternative strategy is to invest in masternodes. Given a stable or even slightly declining market, a sizable investment in masternodes can generate ample passive income. Moreover, this passive income can be reinvested to produce even greater returns (ceteris paribus).

In this manner, masternodes reflect the magic of compound interest. And as such, they can generate wealth fairly quickly. Below are three examples depicting how such wealth can be achieved using compound interest. First, it’s imperative that we differentiate between compound interest and simple interest.

The Miracle of Compound Interest

To quote Albert Einstein, “compound interest is the eighth wonder of the world. He who understands it earns it…he who doesn’t… pays it.”

If you are a young adult who wants to be a millionaire by age 50, now is the time to start planning for it. Waiting until you have more disposable income on hand will only delay the age at which you’ll reach your goal. That’s because compound interest is predicated on regular and sustainable investing. As Investopedia notes, whereas”simple interest is based on the principal amount of a loan or deposit”, “compound interest is based on the principal amount and the interest that accumulates on it in every period.” Here is how to calculate both:

Simple Interest

Simple interest-based calculations are performed using the following formula:

  • Simple Interest (SI) = Principal amount (P) x Annual Interest Rate (I) x Term of loan or deposit (N) in years.
  • Total Amount after Term of loan or deposit (N) years = Principal amount (P) +  Simple Interest (SI)

Compound Interest

In contrast, compound Interest is defined as

  • A = P x ( 1 + r/n) ^ (n x t)

Where

  • A = total amount including principal invested amount & final accumulated interest
  • P =  Principal invested amount
  • r = Annual interest rate [defined in decimals, not in percentage]
  • n = number of times the interest is compounded per year
  • t = number of years

From a mathematical point of view, these formulas alone reveal why compound interest investments provide better returns.

Interest Income Example

Consider the case of David, an investor who finished his undergraduate education at age 24 and started working immediately afterward. Below are three different investment strategies at his disposal:

  1. Scenario A: Between the age of 24 and 34 years, David puts $1000 every year in an account that rewards 6% interest compounded annually.
  2. Scenario B: Between the age of 34 and 44 years, David puts $1000 every year in an account that rewards 6% interest compounded annually.
  3. Scenario C: Between the age of 34 and 44 years, David puts $1500 every year in an account that rewards 6% interest compounded annually.

When it comes to calculating compound interest, it is important to recall that the annual interest rate is the rate at which the principal compounds at. As you can see, investing early in life provides an investor with generous financial benefits later in life.

What are Masternodes? What are STATIC Nodes?

Masternodes

Simply put, masternodes form the backbone of a cryptocurrency network. They’re vitally important for ensuring the security and consensus of the blockchain. As such, each masternode retains a copy of the blockchain in real time and must be in continuous operation. Specialized hardware devices are even sometimes required to run a masternode.

For DIY investors, setting up a masternode typically necessitates an intensive setup session and a dedicated laptop. More commonly, investors turn to third-party masternode-hosting companies like Nodehost, Staking Lab, ZCore, and Stakecube.

Although some masternodes offer an extremely high ROI, they tend to be riskier as well. In general, a masternode’s rate of return will tend to decrease with time as more investors jump on board and/or a coin’s blockchain height grows. Each coin creates their own formulaic basis for determining masternode returns.

Information about current masternodes investment opportunities can be found at masternodes.pro, masternode-stats.com, or masternodes.online. These sites detail each coin’s node deposit requirements, node ROI (daily, monthly, and annual), and nodes in existence.

Please referenceCoinsutra for more information on masternodes.

Static Nodes

Like masternodes, investing in a STATIC node takes the form of a deposit. Thus, any investor who decides to break a node will get their deposit back. However, in contrast to masternodes, investors have the option of investing in three levels of STATIC nodes. As one might guess, the more an investor deposits toward a STATIC node, the higher their expected return will be. STATIC node requirements are as follows:

  • A Level 1 STATIC node deposit consists of 500,000 XBY or 330,000 XBY plus 170,000 XFUEL 
  • A Level 2 STATIC node deposit consists of 250,000 XBY or 170,000 XBY plus 80,000 XFUEL 
  • A Level 3 STATIC node deposit consists of 125,000 XBY or 85,000 XBY plus 40,000 XFUEL 

In addition, STATIC node deposits require a non-refundable registration fee.

STATIC Nodes from an Investment Point of View

Based on our conclusions from the compound interest study above, it is clear that registering a STATIC node early is prudent investment strategy. Below are a few important items to keep in mind when hosting a STATIC node:

  • The market price of the tokens (XBY and XFUEL)  vary according to supply and demand of the tokens.
  • As the token (XBY and XFUEL) price rises, your total wallet balance will rise at a faster rate as a result of reward tokens being added. This will significantly increase your profits.
  • As the token (XBY and XFUEL) price drops, your wallet balance will decrease slower thanks to the additional tokens that you earn as a result of rewards. This acts as an insurance for your initial investment.
  • Earlier the STATIC node is set, the better it is from an ROI point of view.

Seek licensed professionals for investment advice. As with everything in the Cryptocurrency realm, please keep your account information and your funds safe. Never invest more than you are comfortable losing.

Would you like to know more?

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