What Are Masternodes and How Do They Work?

Masternodes are specialized servers or full nodes that perform specific functions on a blockchain network, such as processing transactions, validating new blocks, and enabling advanced features. In exchange for their services, masternodes are typically rewarded with a portion of the block reward, similar to how miners are rewarded for validating transactions on a proof-of-work blockchain. Masternodes typically require a significant amount of collateral, such as many coins, to be operated. This helps to prevent Sybil attacks and ensures that a…