Elrond Democratize Masternodes
By: Jose F. Aznar
Tags: Elrond, Blockchain, Masternodes, Proof Of Stake

This is not an investing advice, I’m holding tokens of Elrond and run some nodes, remember to Do Your Own Research before you invest in any project.

I want to summarize my vision of what is happening in the Blockchain industry around how the projects define his business model, how it’s affecting the centralization in governance/ownership and why Elrond project get my attention in the current crypto panorama. I structured this article in 3 sections as I understand had been evolution stages in the way of design blockchain projects.

Blockchain Stage 1: PoW

From 2009 to 2017 the more common approach to decentralize blockchains was Proof of Work. His preliminary idea was that a group of miners will be owners and benefactors of the Blockchain.

The problem begins when it comes to really professional space, with huge players and companies competing to mine more Bitcoins, Litecoins or Ethereum. The miners need expensive computing hardware and a lot of resources.

As the projects gets older, the hashrate goes up and some of them had hard forks as a manner of recovery the essential idea of decentralize this coins/blockchains.

As an example, projects like Litecoin fork, at the beginning was more democratic as it was really easy to mine it. Now you have few companies that domain completely the Litecoin Mining Space. You have the same example for Bitcoin Cash.

Finally what we have is that most of the big blockchains PoW has ended in few hands, and finally is not so democratic system as it was thinked initially.

Today there’re few new PoW projects that try to democratize this, a good example is Ravencoin, you can mine with home Nvidia Graphic Cards. But again his business model makes that as more competition there’s more professional players.

In this model, as much traction has a project, less decentralized it ends up.

Blockchain Stage 2: PoS

From around 2017, some engineers and thinkers begin to draw a new system that spend less energy, require less resources and is more democratic: Proof of Stake.

In this approach, in the blockchain there are nodes and/or masternodes. Simplifying, a node is a machine with a huge stake of tokens, that helps validating transactions. In the whiteboard the idea was fine, it seems more democratic that PoW of course.

The problem again comes with the barriers to have a masternode. Some of the projects like Ontology need huge amount of stake and a slow process to have a masternode. Another example more flexible is Dash, but again you need like 100k USD to have one node of Dash.

Sometimes projects like Cardano, that I like a lot, try to decentralize as much as posible, but the barrier to have a node is clearly technical. In Cardano is really easy to end completely lost into deep technical websites.

Some of this ideas at the end aren’t so democratic and hasn’t a network so decentralized.

Blockchain Stage 3: PoS truly accesible

At this point, we’re seeing some new projects that truly believe in a business model where you need less investment to have a node. And with good educational process to make it accesible to people not so experts in tech.

One of them is Elrond, that only need 2.5M tokens and a consumer computer to have a node and participate on the earnings of the blockchain. In this moment it’s about 2000 usd to have one, like 50 times less than Dash.

They have created a Documentation site to help everyone to understand how it works. With really useful tutorials to start your node. As example: How to install an Elrond node (Windows, Mac or Linux)

The project has amazing community and the team behind it is the kind of team every crypto project must have. The project has lot of technical improvements and they use SPoS, Secure Proof of Stake, really interesting.

I expect to see more projects like Elrond, for now there’s really few projects that are truly decentralized on investors, nodes and voting power.

More info: www.elrond.com