- Decentralized Masternode Network
What are masternodes ?
Are they VPSs ?
What do masternodes do exaclly on network ?
Who is the owner of them ?
Masternodes are the result of Dash's "bad crypto" approach to software design. Making matters worse, most of them are owned by Otoh and/or fourth party VPS providers. Masternodes are the Dash cargo cult's primitive "bamboo runway" attempt to copy Bitcoin's elegant and trustless Layer 2.
Nobody with a background in computer science and information security would ever spec, much less trust, such third parties.
Here's the deep background on why:
From Nick "Most likely to be Satoshi" Szabo's classic
Trusted Third Parties Are Security Holes:
New Trusted Third Parties Can Be Tempting
Many are the reasons why organizations may come to favor costly TTP based security over more efficient and effective security that minimizes the use of TTPs:
Limitations of imagination, effort, knowledge, or time amongst protocol designers -- it is far easier to design security protocols that rely on TTPs than those that do not (i.e. to fob off the problem rather than solve it). Naturally design costs are an important factor limiting progress towards minimizing TTPs in security protocols. A bigger factor is lack of awareness of the importance of the problem among many security architects, especially the corporate architects who draft Internet and wireless security standards.
The temptation to claim the "high ground" as a TTP of choice are great. The ambition to become the next Visa or Verisign is a power trip that's hard to refuse. The barriers to actually building a successful TTP business are, however, often severe -- the startup costs are substantial, ongoing costs remain high, liability risks are great, and unless there is a substantial "first mover" advantage barriers to entry for competitors are few. Still, if nobody solves the TTP problems in the protocol this can be a lucrative business, and it's easy to envy big winners like Verisign rather than remembering all the now obscure companies that tried but lost. It's also easy to imagine oneself as the successful TTP, and come to advocate the security protocol that requires the TTP, rather than trying harder to actually solve the security problem.
Entrenched interests. Large numbers of articulate professionals make their living using the skills necessary in TTP organizations. For example, the legions of auditors and lawyers who create and operate traditional control structures and legal protections. They naturally favor security models that assume they must step in and implement the real security. In new areas like e-commerce they favor new business models based on TTPs (e.g. Application Service Providers) rather than taking the time to learn new practices that may threaten their old skills.
Mental transaction costs. Trust, like, taste, is a subjective judgment. Making such judgement requires mental effort. A third party with a good reputation, and that is actually trustworthy, can save its customers from having to do so much research or bear other costs associated with making these judgments. However, entities that claim to be trusted but end up not being trustworthy impose costs not only of a direct nature, when they breach the trust, but increase the general cost of trying to choose between trustworthy and treacherous trusted third parties.
Personal Property Has Not and Should Not Depend On TTPs
For most of human history the dominant form of property has been personal property. The functionality of personal property has not under normal conditions ever depended on trusted third parties. Security properties of simple goods could be verified at sale or first use, and there was no need for continued interaction with the manufacturer or other third parties (other than on occasion repair personel after exceptional use and on a voluntary and temporary basis). Property rights for many kinds of chattel (portable property) were only minimally dependent on third parties -- the only problem where TTPs were needed was to defend against the depredations of other third parties. The main security property of personal chattel was often not other TTPs as protectors but rather its portability and intimacy.
