Can you explain how a masternode works in a more detailed way? I'm curious to see how all the moving parts work in coordination--on just a cursory look, it seems like an added complication (unnecessarily so) to a cryptocurrency.
The nodes create a 2-tier architecture allowing additional services to be deployed on top of the standard PoW currency. Whether this is unnecessary depends on your point of view about the features and their utility.
From the perspective of running a masternode, it's just the regular wallet/daemon running on a host with a static IP and collateral of 1000 DASH, normally stored off the node in a cold wallet. There is a key in the config file that identifies the node so you can start it remotely from the cold wallet.
The DASH wallet/daemon is forked off bitcoin core with a load of additional code written by the DASH devs. From a networking standpoint everything sits behind TCP/9999 so this is typically the only port listening to the internet.
Presently the masternodes provide privacy functions (Darksend) and instant transactions (InstantX), with more features in the pipeline (e.g two-factor auth).
Whitepaper here:
https://www.dashpay.io/wp-content/uploads/2014/09/DarkcoinWhitepaper.pdfInstantX white paper here:
https://www.dashpay.io/wp-content/uploads/2014/09/InstantTX.pdfReview by Kristov Atlas here:
http://blog.anonymousbitcoinbook.com/2014/09/darksend-paper-version-2/