Masternodes are nodes on a network that frequently need a minimal amount of a certain coin to be staked in order to receive staking rewards. In some blockchain networks, a master node is referred to as the central authority.

While other nodes submit fresh blocks for network verification, master nodes do not. Instead, they validate new blocks of transactions in a cryptocurrency. Since they run on a collateral-based system, master nodes require their operators to hold a sizeable amount of the cryptocurrency.

Master node operators receive guaranteed cryptocurrency returns in return for their time and financial investment, typically in the form of a percentage of their share.

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