In addition to traditional Auxiliary Proof of Work (PoW) rewards for merge mining Terracoin, users are also rewarded for running and maintaining special servers called masternodes. Thanks to this innovative two tier network, Terracoin can offer innovative features in a trustless and decentralized way.
What is a Terracoin masternode?
Terracoin uses special servers called masternodes to power PrivateSend, InstantSend, and the governance and treasury system. Users are rewarded for running masternodes; 45% of the block reward is allocated to pay the masternode network. Masternodes enable the following services:
- InstantSend allows for near-instant transactions. Terracoin InstantSend transactions are fully confirmed within four seconds.
- PrivateSend gives financial privacy by obscuring the source of funds on the blockchain.
- Governance and Treasury allows stakeholders in Terracoin to determine the direction of the project and devotes 10% of the block reward to development of the project and ecosystem.
- Terracoin will make using cryptocurrency as easy as using PayPal in the future.
Masternode owners must have possession of 5000 TRC, which they prove by signing a message and broadcasting to the network. Those coins can be moved at any time, but moving them will cause the masternode to fall out of queue and stop earning rewards.
Masternode users also are given voting rights on proposals. Each masternode has one vote and this vote can be used on budget proposals or important decisions that affect Terracoin.
How much can you earn from hosting a Masternode?
Masternodes cost money and effort to host so they are paid a share of the block reward to incentivize them. With current masternode numbers and rewards masternodes earn approximately a 30% return on 5000 TRC for the year of 2017. There is also the possibility for masternodes to earn money from fees. This tool shows a live calculation of masternode earnings. These rewards decrease each year, but the rising value of Terracoin should offset these reductions. As a matter of fact, masternodes were receiving 4.5 TRC per day at the end of 2017 but they were actually less money than today.. There is also the possibility for masternodes to earn money from fees in the future.