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What Is a Master Node?

Master nodes are part of the infrastructure that sustains cryptocurrencies such as Dash. Unlike regular nodes, master nodes do not add new blocks of transactions to the blockchain . Instead, they verify new blocks and perform special roles in governing the blockchain.

Understanding Master Nodes

There are several types of nodes that together form the infrastructure of a decentralized blockchain, collectively providing transparency and security and running the software that implements a cryptocurrency's rules and functionality. Nodes maintain the massive ledger of public transactions in a given cryptocurrency and verify new transactions. Master nodes also play a special role in the management and governance of the blockchain's protocol.

Operating a master node requires a significant financial investment and running costs, including a significant stake in the cryptocurrency itself and computer hardware that is far more expensive than your average laptop. It also requires expertise. As an incentive for people to maintain master nodes, operators are rewarded with cryptocurrency earnings, usually a share of block rewards.

Dash, a fork of Bitcoin, was the first virtual currency to adopt the master node model but many other cryptocurrencies have adopted the model.