A masternode is a cryptocurrency wallet often referred to as a full node which contains a copy of the ledger in real-time. Blockchains can typically be broken down into three types: Proof of work, proof of stake, and a blend of the two. These blockchains need a system for processing transactions which enables the blockchain to function. However, masternodes are substantially different than the functionality of regular nodes. They go above and beyond in functionality compared to a node which is simply relaying blocks and transactions.