Masternode is a full node (computer with the whole unpruned ledger) that supports the network by hosting an entire copy of the blockchain ledger in real-time. In return, the Masternode will receive the crypto coins as a reward. It is a great alternative to mining.

Masternodes are servers or home computers that have a full copy of the blockchain ledger and are collateralize to provide additional services and ensuring that all other nodes are able to connect and get a full copy of the public ledger at any given points.