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What are masternodes?

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Definition

A masternode, also known as bonded validator systems, is a full node on a server that hosts a copy of the blockchain ledger in its entirety.

How do masternodes benefit the network?

Masternodes add functionality and security of the blockchain network. These nodes have the ability to enable additional features such as instant transactions, privacy, governance, and in some cases even execute smart contracts.

In order to run a masternode, node operators must put forth a sizeable amount of collateral of the coin in a dedicated wallet. This is done to ensure they have the a significant stake in the project, therefore reducing the likelihood of an actor operating with malicious intent. These node operators help ensure the entirety of the network runs properly. In turn, masternode operators are benefited with a percentage of the block rewards for their participation.

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