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What are Masternodes?

A component of the infrastructure supporting cryptocurrencies like Bitcoin, Ethereum, and Dash are master nodes. Master nodes don’t add fresh blocks of transactions to the blockchain as normal nodes do. Instead, they play unique responsibilities in running the blockchain by verifying new blocks.

While other nodes submit fresh blocks for network verification, master nodes do not. Instead, they validate new blocks of transactions in a cryptocurrency. Because they run on a collateral-based system, master nodes require their operators to hold a sizeable quantity of the cryptocurrency. Master node operators receive guaranteed cryptocurrency returns in return for their time and financial investment, often in the form of a percentage of their share.

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