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Staking and Masternodes Explained - Build Wealth and Help the network at the same time!


mindnomiks
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Now that you are a Guapcoin owner, now what?! Welp, it depends on how many Guapcoins you got! So... "What do you mean by that??" you may be saying. Welp, though you have a few options available to you, they really fall under two categories.

  • Staking
  • Masternode

These two categories are your options for building wealth with Guapcoin, while also providing a service to the blockchain and help it grow, stay secure and run smoothly.

STAKING

You may be asking "What is staking?" Glad you ask, because I said the same thing, ๐Ÿคฃ. Trust me, as you go on this journey there will be a lot of "What you talking about Willis?" moments. You will read and read and read and still come out scratching your head. Eventually, however, things will start to make some sense, as you persevere.

Now, going back to that question "What is staking?" Welp, staking is the same as saying "make your money work for you". What exactly do I mean? You see, if you have a certain amount of Guapcoins, min 1000 Guap, you hold/lock those 1000 Guaps for a fixed duration and in return earn rewards from the network, which varies base on time and block entered/owned Guapcoin. In essence, you can think of "Staking" as having an interest-bearing account, like in a bank instead the interest is much higher and more rewarding.

Staking is a "consensus mechanism", also called Proof of Stake (PoS), which is needed in a decentralized ecosystem and ensures that all transactions are verified and secured. This mechanism removes the need for a broker, like a bank or payment processor, like visa, from being in the middle of things. When we stake, we become part of that process, well our cryto (Guap) is. Not to get to technical, not that I would be able to much yet anyways, the difference between "Proof of Stake" and "Proof of Work", apart from speed and efficiency, is the fact that transactions are validated by we the people who are invested in our blockchain, Guapcoin, via staking. In essence, we can think of "Staking" to be performing a similar function as mining, which is the process by which a network participant gets selected to add the latest batch of transactions to the blockchain and earn rewards in exchange, such as Guaps.

Keep in mind that when "Staking", your staked coins/tokens act as a guarantee of the legitimacy of any new transaction they add to the blockchain. What does that mean? Welp, if transactions in a new block come to be seen as being invalid then a certain amount of our "Staked" coins are "burned" by the network, also known as a slashing event. I know technical terms ๐Ÿคจ๐Ÿค”๐Ÿ˜ฃ๐Ÿค“!!! What do they mean??

  • Burned - sending otherwise usable coins/tokens (or fraction thereof) to an unusable account, effectively removing coins/tokens from the available supply, increasing its relative scarcity
  • Slashing Event - mechanism built into proof of stake blockchain protocols to discourage validator misbehavior.
    • Usually, the two key misbehaviors that incur slashing are downtime and double signing. That, however, depends on the protocol. In essence, this is question for Guap support, as I don't know what Guap considers misbehaviors for slashing events.
    • Slashing is designed to incentivize node security, availability, and network participation

MASTERNODE

What are Masternodes? Do I need one to participate in the Guap economy? Does it cost? etc. Welp, great questions you have there. Masternodes are servers setup in an always up, always running environment/system, so think electricity and infrastructure, that is connected to the Guap network/blockchain and carries out specific functions necessary for the blockchain to run smoothly. So, you can think of the Masternode as you being the whole bank offering all services. In essence, everyone comes to you, well your server, to handle all kinds of transactions.

So, I hope this helps. If you have any questions please don't hesitate to ask them in the Telegram and/or here on guaptalk. Let us build together and make Guap more than just a success. Let's make it a lifestyle. Happy Guaping!!! ๐Ÿ˜

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