A Daemon is an advanced client wallet that is sometimes referred to as a node, in fact masternodes are just that in that they require a special wallet to run and connect with the network that they are communicating with and performing/relaying the transactions required.
Daemon clients? are of a Command Line Interface (CLI?) that normally run on a Linux? flavor distribution (but can run on other supported operating systems, including Windows and many embedded systems). As any other node on the network, they must validate transactions according to the network consensus? rules, and also must operate without flaws on good hardware with an always-on connection. The reason for this is that if they are deemed as a badly performing node, or even one that is trying to cheat the system, it will be removed from good and active status?, and may possibly result in a ban. Once a peer? is banned it will be marked as a 'bad candidate' for a temporary period of time, thereby no longer able to earn rewards (if staking or acting as a masternode), nor being able to sync the blockchain? and relay information to other peers, including other masternodes, service nodes?, mobile and desktop clients? including Qt wallets, It is very important when operating a masternode to keep the daemon software up to date with major version releases as this could lead to being banned on the network as the *protocol? changes, and the loss of future block reward payments.
Just because the daemon instance? is an advanced interface, there is no reason not to use one as an everyday client wallet if you are familiar with the commands required within the console?. Typically, for convenience and reliability these are run on a VPS but a daemon can operate on a home server or similar powerful computer, to some people these instances?, with their low level interfaces? look bewildering but after some time, practice and a small learning curve; they are fairly simple to operate with added reliability to boot — the difference in a 'normal' desktop client and a daemon is the lack of a Graphical user interface (GUI?. However, with the command console? a similar experience can be found with some practice. There are some small differences in configuration but otherwise function just the same. The only difference being that mainstream graphical wallets handle all the commands for you via the frontend?, while you must enter them yourself with a daemon. In addition, you may find that you appreciate the ability to use the more advanced commands otherwise unavailable in a GUI?. You can find the commands by entering 'help' via the cmd or debug console?.