What is a Masternode?

Masternodes are a unique concept and buzzword in blockchain technology that we are beginning to hear more and more. Many people only vaguely understand what a masternode is, and what purpose they serve. To shed some light on the what constitutes a 'masternode' in a blockchain network, first lets talk about what a blockchain is:

What are nodes in a blockchain

A blockchain is a series of interconnected nodes on a network. Each node contains an identical copy of the blockchain's decentralized ledger.

Regular nodes are 'dumb' and do not have any requirement's or perform any tasks around maintaining the blockchain network asides from sharing network data across the network.

Masternodes have tasks and requirements that are outside that of standard nodes. If a node in a blockchain network has any additional requirements or responsibilities that are listed below, its probably a masternode:

For a node to constitute as a masternode it must be on special server (usually with hardware requirements) that is maintained at all times. The node cannot have any downtime.
The node acts as a manager for the system while also performing special jobs and earning transaction fee's as a reward in exchange for performing tasks.

Thats it!

Masternodes come in all shapes and sizes with varying requirements and benefits attached to running them. At its core, if a node has any special requirements or responsibilities within the blockchain network, it constitutes as a masternode.