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What are Masternodes ?

Masternodes, like any other node, are primarily servers within a decentralized network. They store a complete copy of the blockchain that guarantees a certain level of performance and functionality for specific block validation tasks. This includes PrivateSend and InstandSend as anonymity and instant transaction functions. In another section we will go into more detail on the individual functions. Masternodes are paid for this service according to a concept known as the "proof of service". It is often confused with the alternative mining method "proof of stake". Proof of Service is considered as additional evidence of work that Miner and Staker provide to secure the blockchain. Masternodes, also with part of the block rewards, are paid for this proof of work. The percentage of this depends on the project and can be very different. Masternodes also have the right to vote and have the option of submitting and coordinating governance proposals. We will talk more about that, too.

Any investor can run a Masternode, provided the projects have implemented Masternodes in their blockchain. The aim is to create sufficient decentralization. It ensures that no single person controls a significant portion of the Masternodes. A condition must be fulfilled so that the network is not filled with unnecessary master-nodes or ruthless operators promoted. In other words, to be able to start a masternode requires a certain amount of coins, which the investor must deposit as collateral. These coins should not be spent or moved, otherwise the master mode will stop working. The result is that due to the lack of evidence of work, the payment is discontinued.


Most of this information was acquired and generalized by Dash Core, for the most part.