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.