Masternodes primarily exist to create a distributed consensus on the blockchain. While some cryptocurrencies achieve a distributed consensus through mining, masternodes have several characteristics that make them advantageous in terms of network reliability and direct benefits to operators & individual stakeholders alike.
Creating distributed consensus on the blockchain
Definition and purpose
On the technical side, a masternode is a cryptocurrency full node or computer wallet that keeps a copy of the blockchain in its entirety, in real-time, in perpetual operation and forms a decentralized network of communication. Masternodes are considerably different in their functionality than normal nodes because they perform several other functions apart from simply keeping the full blockchain and relaying blocks/transactions.