What is a Masternode?
Masternodes are servers connected to a network, or blockchain that carries out specific functions pertinent to the operation of the blockchain. A masternode is a full node or a cryptocurrency wallet that is fully synced on the blockchain.
Some of the functions a Masternode may perform are:
- Processing private transactions
- Processing instant transactions
- Participate in governance or voting
There is a sizable investment to purchasing and running a masternode which is why masternode holders have to be incentivized (paid) to do so.