I’m going to be honest here. This week I’ve seen two of my masternode investments vanish into thin air. Developers who just pull the plug, empty their bags, claim the money and close social media platforms and/or websites. This happened to me with DRIP and XG, but there are plenty of other masternode projects out there that are trying to scam you.
This guide will serve as a way to invest in masternodes as responsible as possible.
Things to look at when you want to invest in a masternode project:
- Only invest in coins that serve a purpose. If it’s another privacy coin, than do not invest.
- Do not invest when it’s just an MN project that promotes itself with the high ROI.
- Do not invest when the team does not reveal itself. If the team does show photos: Google their names, look up their Linkedin profiles, do a Google search on their images. Make sure they are who they say they are.
- If it’s a company that’s behind the project: look up their website. Only invest if they are actually registered at the chamber of commerce.
- Check who registered the website, using a Whois tool. The less information is available, the more alarm bells should be ringing.
- Only invest when the concept doesn’t sound outlandish. If it’s too good to be true, it’s probably a scam. Also think things true: does this idea REALLY require blockchain technology?
- Only invest when the project presents an actual whitepaper that outlines: current market situation, how the project will improve the current situation, a technical analysis of what their system will do, a roadmap for at least 12 months, all presented and well documented in English and perhaps other languages.
- Do not invest when the coin is promoting its high return of investment (ROI) as one of its perks. ROI drops when more nodes come online. Coins that give lots of rewards early in the masternode reward cycle, are probably a scam. Be on alert!
So you decided all the points mentioned above are worth your risk? Okay, cool! But how do you invest responsible into a masternode project?
- Do not invest in the pre-sale of a MN project, especially if the project already made some alarm bells ring during the initial product check.
- Cash out your early investment and an a bit of profit as soon as you can. That way, when the project turns out to be a scam, you’ll not lose your initially invested money.
- Try to get a registration at every exchange the coin is selling: often CryptoBridge, Graviex, Cryptopia, Coinexchange, Escodex, Crex24 and Stex.com. That way you will always be able to sell your coins, before they drop to 0 completely.
- When a project is not even one year old, having 10+ masternodes is nonsense. When the project falls you will have 10 times nothing, so be smart about this. Hold a couple of nodes and cash out your income.
- You can always use your MN income to invest in new masternode projects. As always, make sure your total investment is spread out over multiple masternode projects.
- It’s always best to invest in the biggest coins. So when you can, invest in DASH, PIVX, THC or PHR. The ROI won’t be that high, but these are very stable projects.
As always: DO YOUR OWN RESEARCH. You can use this article as your checklist or guide, but always make up your own mind based on your own research. Stay safe!
If this was helpful, drop me a cup of coffee:
ETH – 0x4ccadb03b6d53273e565732f0a472dde82365201
BTC – 34CpoxRwJzEzBg7D6DtXTbkUVvzPXyTbKQ
XRP – rD3tSCiBXP1dXbGptreX1VBenoH6oaec1W
LTC – LV2CaMFL7LszxSXTgvrroaebXTFgkEf3Kz
TRX – TKKZvEr8VvrX27jQa52635Xq7SafJAdRCu