For my first post on Steemit I'm writing about why you might never ROI with masternodes, hoping to save a few newbies from losing their precious BTC.
Reason #1:
You are too late to the party. By the time you have your masternode up and running, the early masternode holders and miners are tanking the price faster than it can recover. You are simultaneously getting screwed in two ways:
1) The price is rapidly declining so your payouts are worth less and less every day.
2) Due to this decline in price, more masternodes come online which means your payouts decrease.
Sales pitch: 5000% ROI masternode for 0.25BTC, ROI in 13 days!
Expectation: Wow 0.019 btc every day, infinite money!
Reality: Day 1 income -> 0.02btc, Day 2 -> 0.005 btc, Day 3 -> 0.0015 btc... Day 25 -> 0.000001 btc.
Odd are by the time you hear about a high ROI masternode you will be buying it near its unsustainable all-time high price.
The only thing that will stabilize a price is hype. The moment marketing slows down and initial excitement wears off, sell orders will quickly overwhelm buy orders. This is true whether the project is real or a scam.
Reason #2:
You are getting scammed. That pretty website with a nice logo / whitepaper? Could be a front, the team might have no intention of developing anything. Two ways you will get scammed:
1) The new coin you bought a masternode for disappears right after successfully selling a few masternodes via auction. Discord vanishes, website throws an error, announcement thread is gone. Hasta la vista btc.
2) The team dumps pre-mined coins. Could be planned for when the coin reaches a target price / volume or unplanned when the team suddenly realizes that they won't end world hunger with a PoW/PoS cryptocurrency, so they pack their bags and sell pre-mine at any price.
Reason #3:
The project fails and your coins are worth nothing. There is an incredibly high rate of failure for new businesses across all industries and crypto is no exception.
Github / development activity steadily declines. No updates in weeks, no effort to communicate. Developers slowly drop off Discord. I call this the crypto-irish exit.
For my next post I'll write about what you can do to avoid some of these common mistakes and hopefully help you earn you come sweet btc!