How to Earn a Passive Income with YieldNodes
What in the name is YieldNodes?
First of all this is not exactly the easiest thing to understand in cryptocurrency but to understand what a Node or a Master Node is will give you a sense of what the business is about. However let me break down the word yield and nodes. By running your own node, you don't have to trust anyone to keep the network honest — you do it yourself. If a transaction breaks consensus rules, your node will automatically reject it and it won't be carried out, even if everyone else accepts the transaction. This is one major benefit of a decentralised finance system in that it allows trustless transactions where no one person or entity is in control of your money or transactions. You take control and responsibility for your assets and receive compensation for securing the cryptocurrency network. This is master noding
When did YieldNodes start Operations?
YieldNodes has been a private master-noding project since Summer 2018, and entered Beta-Test phase with invited participants at the end of October 2019 (See Beta page here). Since then, they lowered the minimum Rental Fee and opened the program to the public following the introduction of new team members.
How Does YieldNodes make Money?
Proof Of Stake (POS) aims to reward individuals with currency, but instead of solving complex equations as with Proof of Work, one simply has to provide proof of “stake” (i.e. ownership of the coin you want to be rewarded for). In order to do this, a user must deposit their currency in a specific wallet, where they are frozen and can then be used to generate coins. There is usually a minimum investment amount needed in order to qualify for POS rewards, and this is often referred to as a “masternode”. In order to qualify for a masternode, there is usually a requirement to buy a high volume of coins, which can be very expensive.
Once a masternode is set up as proof of stake, coins are awarded to the masternode owner on a monthly basis. These coins can then be traded into different cryptocurrencies, or even exchanged into fiat currency (such as USD or GBP).
Each POS cryptocurrency has a different reward for its masternodes. Some offer only a very small return, equating to around 2% per month, whilst others offer hundreds or even thousands of % per month. Unfortunately, most coins have very little value, and the coins that offer very high returns are often worthless. This means that when they are exchanged for other currencies even a very high number of coins does not buy much fiat currency. The lower % return coins often have the highest exchange value. Therefore, there is a great deal of experience required in finding coins that have offer 1) a strong value against other coins and 2) offer a good monthly return from the masternode.
The Yieldnodes team therefore offer investors value in 3 ways;
Researching the best coins to masternode amongst the thousands of coins available, balancing value with returns to create a steady (and significant!) monthly return. Average Returns are usually between 5% to 15% monthly.
Pooling funds between multiple investors so that even small investors can benefit from masternodes
Providing the technical expertise required to create a masternode as proof of stake.
As with any asset that fluctuates in value, cryptocurrencies present a risk because the value of the coins fluctuates against each other and fiat currencies (USD, EUR etc). Risks can be mitigated by masternoding several coins at once so that not too much risk is put into one single coin. This creates a portfolio of cryptocurrencies, so even if there is a big swing in value on one coin it doesn’t impact the overall portfolio too much. When you invest in Yieldnodes, you are therefore benefiting from a portfolio of cryptocurrencies, and you’re not just exposed to the success or failure of a single coin.
How to Invest in YieldNodes
Investing in YieldNodes is very easy. Of course you need to sign up and also provide KYC information . You can either deposit your investment in dollars using YieldNodes' accepted 3rd party money transfer partners Walleteze or in cryptocurrency. Your return of investment is paid monthly and will usually be paid in either bitcoin or ethereum. Please note that your funds are locked in for 6 months initially so don't invest funds that are needed immediately. In addition, compounding to speed up your earning is also available. After funds have been invested for 6 months you are free to withdraw them or leave them to continue to earn profits indefinitely (the website states 2-year maximum term, but you can keep funds with them for as long as you want after the 6-month initial contract has ended and have complete flexibility on when to withdraw).
What Is The Minimum Investment?
The minimum investment amount is €500
The maximum deposit is €250,000
Final Take Away
The YieldNodes has been in operation for 18 months to date and has shown stable growth and is paying each investor, large and small on time. YieldNodes pays out 85% of profits and keeps 15% for itself. You should also know that if returns on profit fall below 5% for three consecutive months, YieldNodes will return your capital and accrued profit for the period. This business is different and good. The team are all registered on LinkedIn so you can check them out and verify for yourself that the business is a legitimate medium to longterm source of passive income. Additionally, you can visit their office and discuss with the CEO about YieldNodes' awesome business model.