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Before learning about Masternode, First of all, we need to understand the concept of node in blockchain. A blockchain consists of blocks of data and these blocks are stored in nodes (which can be compared to small servers). Nodes can be a variety of devices including computers, laptops, or even large servers. Nodes form the infrastructure of a blockchain and are connected to each other to constantly exchange the latest blockchain data to stay up-to-date.
When a miner adds a new block of transactions to the blockchain, this new block is broadcast to its peers on the network. Each node first checks the validity of the block based on the validity of the signature and transactions, and accepts it if approved. After accepting a block, it places it on top of other previous blocks. In fact, the process of accepting new blocks in nodes is as follows:
Nodes check the validity of block transactions and accept it if it is valid and reject it otherwise.
Nodes store blocks of transactions (which in turn store the history of blockchain transactions).
Nodes broadcast the transaction history so that other nodes that need to synchronize with the blockchain can update their history.
Masternodes are part of the blockchain infrastructure that hold digital currencies such as Bitcoin, Ethereum, and Dash. As the most different type of node, masternodes do not add new blocks to the blockchain. Instead, they approve new blocks and play a special role in the governance of the blockchain.
To better understand these special nodes, take a look at their properties:
Masternodes verify new blocks containing cryptocurrency transactions.
Unlike other nodes, they do not send new blocks to the network for verification.
Masternodes operate on a collateral-based system.
This means that operators must hold a significant amount of digital currency.
By investing time and money, masternode operators benefit from a guaranteed income from digital currencies.
Usually, a percentage of the transactions is awarded to the operators as a bonus.
There are different types of nodes in a decentralized blockchain and they are responsible for the security of the network. Nodes maintain a massive ledger of public transactions for a cryptocurrency and confirm new transactions. Master nodes also play a role in managing and steering the blockchain protocol.
Setting up a masternode requires significant financial investment and ongoing costs, which include owning a large amount of network crypto or high-cost computer hardware. It also requires expertise. A share of block rewards is usually considered as an incentive for operators.
Dash, as the first digital currency to adopt the Masternode model, was started by the Litecoin fork, and then many other digital currencies continued this model.
Full nodes play an essential role in maintaining the functionality of a digital currency. Each full node keeps a complete copy of the blockchain’s transaction history and submits new blocks for verification by other nodes. Every time a new block of transactions is sent, all other nodes must confirm the transactions before they are added to the permanent ledger. This process also includes the master node. The main difference between a master node and a full node is that masternodes typically do not send transactions for confirmation; They only approve items submitted by other modes.
In addition to performing the tasks of a normal node, such as receiving, storing and publishing data, master nodes make it easy to perform other tasks that are part of the essence of blockchain. These events can be voting, implementing network protocols, and advancing the desired blockchain rules.
Masternode in digital currencies can be used by everyone. It should be noted that in some networks, the number of master nodes is limited. Due to the availability and high power of master nodes, some networks apply strict conditions to approve new master nodes. In other words, to use a masternode, you need a bond and a commitment in a particular blockchain.
This process is to ensure that the owner of the master node does not have the power to destroy or cheat the system. In proof-of-stake blockchains, the large initial capital of the masternode operator is locked in the form of stakes in the network so that in case of violation, his capital will be confiscated.
In technical terms, the master node operator has no chance of cheating; Because his violation endangers the operation and execution of the entire system. Therefore, even if he tries to do something fraudulent, he will be fined.
