In the cryptocurrency space, it is very easy to get passive income. Hosting a masternode enables an operator to get passive income with little or no effort and at minimal cost. The masternode owners earn portions of block rewards in the cryptocurrencies they are facilitating as an incentive to them. Incentives given to the masternode operator depends on the governing algorithm of the projects. Some cryptocurrencies pay out incentives to the masternodes operators several times a day, some once daily, others once every seven days or monthly. The main benefits are, the masternode owner does not have to buy expensive or specialist mining gear as it is with the blockchain mining. He also gets rewards regularly.
With the mastermodes, operators earn crypto coins on the block by providing service to the network and investing a minimum amount to earn the incentives.

Masternodes with HashNET Protocol Requires:

1. Masternodes with HashNET is made up of the masternode owner who is also known as the masternode operator.
2. The potential masternode owner needs to have a collateral to be legible. Collateral in Tolar token (TOL) is needed to guide as a barrier to malicious entry into the system. It also ensures that the masternode owner has something at stake in the project. The required entry collateral for Tolar HashNET is 500,000 TOL. The collateral cryptocurrency is locked while the masternode is active. An entry barrier is created to ensure that the masternode operator doesn't corrupt or cheat the system. The collateral is frozen and the masternode operator sends out of the network, when there is an offense such as constant malicious behavior like DoS attack, voting in of invalid transactions or data.
3. The HashNET masternode owner needs a dedicated IP address from a server network or VPS network connected to a computer network which is used as the decentralized infrastructure for the masternode. The requirements for this are :

1. quad core 64bit processor - Which read and execute central processing unit (CPU) instructions of the computer.
2. 16 GB RAM ▪ 128 GB of available disk space – Storage space for the blockchain.
3. 50 Mbps symmetrical internet connection – Internet access from internet service provider (ISP) or Local Area Network (LAN).
4. Fixed and unique IP – Ensures that only one masternode runs on an IP address.

Masternodes will not receive any reward if they do not have a strong network speed (bandwidth).

Functions of Masternodes owners on HashNET Protocol

1. Masternodes owner helps secure the HashNET network by validating transactions that have a correct signature for output spend. They validate instant transactions.
2. Masternode operators ensure that transactions are in the correct data format.
3. The masternodes operators prevent double spending from two conflicting transactions.
4. The masternodes operators ensure that valid output is spent.

Masternode Rewards with HashNET

Masternodes operators are incentivized for securing and supporting the masternode network. They are rewarded with a portion of the masternode block. With the HashNet Masternodes, masternodes owners are rewarded as follows:

1. Masternodes owners are rewarded base on transaction fees of all transactions they helped validate correctly and on time. This depends on the network usage hence amount rewarded will fluctuate. The more the transaction consummated the more the reward for masternodes owners.
2. For the first 3 years, masternodes owners will be incentivized from the Tolar monetary reserve fund if the transaction fees fall below 10 %. This is done to ensure the best possible start of the network. Part of rewards will be taken from Tolar reserve fund to ensure a minimum of 10% ROI.

Scenarios

Scenario 1:

Network constantly running at 0.1% capacity on average
Around half of TOL supply in masternodes (around 1000 masternodes)
Generates:
(200 transactions/sec * 0.01 TOL (fee) * 31,536,000 sec (1 year)) / 1000 masternodes =
63,072 TOL / masternode 63,072 TOL / 500,000 TOL = 12,6 % In this case, masternode owners makes
12,6% ROI yearly

Scenario 2:

Network just starting, running below 0.005% capacity on average
Only small part of TOL supply in masternodes (around 200 masternodes)
Generates:
(10 transactions/sec * 0.01 TOL (fee) * 31,536,000 sec (1 year)) / 200 masternodes =
15,768 TOL / masternode in this case, part of rewards be taken from Tolar reserve fund (up to 1% of supply
per year reserved for masternode rewards):
7,000,000 TOL / 200 masternodes = 35,000 TOL / masternode Total: 50,768 TOL / masternode 50,768 TOL
/ 500,000 TOL = 10,15 %

Scenario 3:

Network getting a lot of usage and traction (running at 0.2 % capacity on average)
Lot of TOL in masternodes (around 1500 masternodes)
Generates:
(400 transactions/sec * 0.01 TOL (fee) * 31,536,000 sec (1 year)) / 1500 masternodes =
84,096 TOL / masternode 84,096 TOL / 500,000 TOL = 16,8 %

Governance in Masternode HashNET Technology

HashNET technology allows masternodes owners to part take in the governance and decision making on issues concerning the project. They are not just technical validators but part of the decision-making team. The operators are engaged in the decision making by voting on tenders submitted. They either accept or reject a proposal base on their own perspective and judgment. Tenders can be a node from :

1. Social impact
2. Decentralization and governance
3. Outreach
4. Contribution to network
5. Extensiveness

For more detailed information. Visit reference links:

Telegram: https://t.me/TolarHashNET

Facebook: https://www.facebook.com/TolarHashNET/

Twitter: https://twitter.com/TolarHashNET

Whitepaper: https://www.tolar.io/wp-content/uploads/2018/08/Whitepaper-Tolar.pdf

Website: https://www.tolar.io/

Bounty0x username: Munareal

Author's authentication Bitcointalk Profile link: https://bitcointalk.org/index.php?action=profile;u=1163494