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What is Proof of Work (POW)?

To know about Proof of Work and Proof of Stake, we should first know about blockchain and the working mechanism of the technology. Blockchain is an append-only ledger meaning that the data can only be uploaded but can’t be erased or removed. A blockchain is like a decentralized server supported by distributed nodes, where transactions are stored in a public ledger. A set of transactions are bundled together to form a block. The first block in a blockchain is called the genesis block. New blocks are created at specific intervals and are consecutively added to the end of the chain. Nodes validate the authenticity of new blocks through a consensus mechanism. 

What Is Consensus Mechanism?

The consensus mechanism acts as a solid foundation supporting a blockchain network. In simpler words, the consensus is reaching an agreement among all of the nodes in the network, to approve the newly created block. Using this mechanism, every transaction and block is verified before being added to the end of the chain. 

“Proof of Work” and “Proof of Stake” are the two major consensus mechanisms that are widely used by cryptocurrencies to verify new transactions. Bitcoin, the first cryptocurrency uses the Proof of Work consensus mechanism. Consensus helps to prevent double-spending in which the same coin is spent twice. They also help us in eliminating the need for a third party and thus maintain decentralization.

Proof of Work:

Proof of work in cryptocurrency is a consensus algorithm first published in 1993. Later, it was implemented by Satoshi Nakamoto in 2008 in Bitcoin. In this consensus mechanism, the ones that intend to create a new block are called the ‘Miners.’ Miners are responsible for adding a new block to the chain. 

Proof of work makes use of the advanced form of ‘Cryptography.’ Cryptography uses complicated mathematical equations which can be solved only by powerful computers aka miners. Whenever a block is created, a new cryptographic equation is generated and is needed to be solved by the miners, to add the block to the chain. The miner that solves this puzzle is rewarded with cryptocurrencies. 

  • Since every transaction is verified, it adds trust, accuracy and reliability to the transactions. 
  • Proof of Work coins requires setting up many full nodes to prevent 51% of attacks. 
  • The energy consumption of this mechanism is considered to be directly proportional to the number of full nodes, (i.e) the energy consumption gets higher along with the usage of the network. Many debates are saying that bitcoin exhausts a high amount of energy to run the network. 
  • The mathematical equation gets more complex with time and usage, resulting in consuming more energy and reducing the transaction speed. 
  • The capital investment is quite high since the hardware required for setting up a full node is not cheap. To overcome these limitations, the Proof of Stake consensus mechanism was introduced. 

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Beldex (BDX) Listed on Masternodes Online

Beldex (BDX) Listed on Masternodes Online

Dear Beldians,

     We are pleased to announce that we are listed on Masternodes Online: https://masternodes.online/currencies/BDX/. Masternodes online is a comprehensive masternode data provider. You can now check the Beldex masternode count and reward stats in near real-time. 

On MNO, you can see our complete masternode stats like,

  • Number of masternodes in the network
  • Daily, weekly, and monthly rewards 
  • Masternode reward frequency 
  • Total BDX staked in Masternodes as collateral
  • Total Masternode Cap 

 

Excited about Beldex masternodes? 

Check out our guide on how to set up a Beldex masternode. By setting up a masternode and staking BDX, you contribute to the network’s stability and security. 

You can also stake BDX on the Evonodes shared masternode pool. This is an easier alternative to setting up a dedicated masternode. The hardware requirements and the complexity of setting up a masternode are taken up by masternode pools. To participate, all you need to do is create an account on the platform, select BDX masternode pool and stake BDX. 

Join our community to know more about our recent developments. 

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How to Earn from Beldex Masternodes?

     Masternodes are the evolution of nodes in a blockchain network. A masternode is simply a node that has certain additional responsibilities. Thus, to know about Masternodes, we must know about nodes, light nodes, and full nodes. Nodes validate transactions in a blockchain. Thus, all nodes in a network store a copy of it. As new transactions are bundled together in a block and added to the blockchain, nodes verify these transactions, validate the block, and update their copy of the blockchain. Thus, nodes are essentially validators who receive rewards for their contributions. 

A typical blockchain network grows in size with time, as more and more blocks are added to it. A good example of this is Bitcoin. Bitcoin grew larger with adoption. Data from Statista shows that the Bitcoin blockchain was around 10 MB in April 2010. Now, it is more than 344 GB. As hardware requirements change, it becomes increasingly difficult to set up a Bitcoin node. Thus, light nodes came into play. 

Light nodes: Light nodes are nodes that only download the recent history of transactions to validate blocks. They do not hold the entire copy of the blockchain. Thus, light nodes can validate blocks faster as they only need minimum computational resources. 

Full nodes: On the other hand, full nodes hold the entire copy of the blockchain and are generally more secure. Even if all but one full node were to be corrupted, the blockchain can still be restored. Since they validate all the blocks, they require greater computational power. 

 

What are masternodes? 

Masternodes are full nodes that store the entire copy of the blockchain. The more the masternodes in the network, the more secure the network is. But how does a masternode differ from a full node then? 

Masternodes hugely differ from full nodes in that they provide staking opportunities to the validators. Validators can stake their coins on masternodes and earn passive income. In addition to this, certain Blockchain networks, depending on their architecture, provide voting, governance and regulatory rights to Masternodes. 

About Beldex Masternodes

Masternodes can be part of networks with both Proof of Work (POW) and Proof of Stake (POS) consensus. The Beldex Masternode currently follows the POW + MN architecture. As the Beldex network transitions to a full POS network, the masternodes will be updated to a POS + MN architecture. 

Beldex masternodes are essentially validators that earn rewards for their services. In their current state, they can validate blocks, but cannot add blocks to the blockchain until the scheduled POS hardfork in Q4, 2021. 

How to Earn from Beldex Masternodes 

For each newly created block, 2 BDX are minted as rewards. Rewards are shared based on the number of masternodes in the network. If you’re a masternode enthusiast looking to earn passive income, then check out how to set up a Beldex Masternode below. 

 

How to set up a Beldex Masternode

The best crypto masternodes are ones that provide you with easy access to staking. You can easily stake BDX either by setting up a Beldex Masternode or on a shared masternode pool. 

Requirements to set up masternode: 

  • Hold the required amount of BDX as collateral. The minimum amount required to set up a masternode is 10,000 BDX. 
  • Have the required hardware to set up the masternode – you can find the complete software and hardware requirements here
  • Then, follow the steps listed here 
    1. Download the entire copy of the blockchain 
    2. Run the Beldex Daemon 
    3. Obtain the MN key 
    4. Create a Beldex wallet 
    5. and register your Masternode. 

Requirements to stake on a masternode pool:

  • Open an account with the staking platform. 
  • Choose BDX staking pool and stake the desired amount of BDX.

You can currently stake on remote masternodes on the Evonodes shared masternode pool here. Beldex will provide more staking platforms in the near future to stake BDX. 

BDX is a masternode crypto and the Beldex chain is supported by Masternodes. Thus, the network’s decentralization, security, and scalability depend on them. Once full POS is live, Masternodes will receive 100% of the block rewards and have the highest authority on the Beldex network. 

Join our community to know more about our recent developments. 

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