A masternode is a complete node that holds the complete copy of the blockchain. These complete nodes are connected to a network from which transactions are made. The motherboards serve to solidify the network by making it possible to create, receive and transmit useful information to the blockchain.

In return for the service given to the community, people who set up masternodes are rewarded regularly with dividends paid in the form of cryptocurrency. However, to be eligible for the masternode and win the trust of the community, an entrance fee must be paid. This right of entry is called the collateral. This is the number of wedges needed to be allowed to own a masternode. Depending on the currencies, the collateral varies. The first coin to launch the principle of the masternode is Dash.