Whether you’ve just started your adventurous journey within the Web3 space or crypto wonderland, it is essential to understand the nature of such ecosystems and what key component is helping sustain the decentralized infrastructure.
Being part of the cryptocurrency network and found in popular currencies, such as Bitcoin or Dogecoin, blockchain nodes are the component that keeps the system running, keeping track of the digital assets.
In today’s article, we discuss everything you need to know about the blockchain nodes, what they are, how many types of nodes there are, and, more importantly, how it’s impacting the blockchain network architecture.
So, without further ado, let’s jump in.
In short, crypto nodes are the moderators for creating and sustaining a decentralized infrastructure, meaning a device running the protocol software of a decentralized network. However, from a technical point of view, these nodes, also called blockchain nodes, are the point of contact between a computer and the blockchain network, managed by a blockchain protocol’s software.
Usually, such nodes operate based on a set of rules depending on the network, type, and capabilities to ensure the reliability and security of its network, whereby the most common purpose is validating transactions and ensuring users’ trustworthiness.
Later, we will discuss the sole purpose of each type of blockchain node, depending on their type.
Since the nodes are moderating the blockchain, ensuring that users play by the rules and serving as a source of truth for the blockchain, the nodes add up to the decentralized nature of a blockchain. The more blockchain nodes are found, the more decentralized the blockchain becomes.
You must understand that nodes will play a more significant role in sustaining blockchain-based applications as technology develops and is increasingly adopted.
As each node stores its copy of the blockchain, it acts as a decentralized storage space, thus helping the entire blockchain ledger and adding new blocks to the chain. However, the node’s primary function is to maintain the integrity of the blockchains, as nodes play a vital role in their security and growth.
But as said, they serve a specific purpose depending on the type of blockchain node. Yet, there are three main benefits to them, such as:
Each node stores its copy of the blockchain, acting as a decentralized storage space. Thus helping the entire network and adding new blocks to the chain, ultimately creating the blockchain. Moreover, blockchain nodes are cheaper and more sustainable, an alternative to crypto mining.
We know that usually, transactions are verified within a decentralized nature, but have you ever wondered how this is possible since there is no centralized authority to do this?
Well, within blockchain technology, it is possible to validate the transaction with the help of nodes, whereby some can validate, and others just store the blockchain data.
One of the blockchain’s characteristics is the fact that it is transparent, amongst many other significant aspects. This is the case with blockchain nodes, as they allow users to interact with the network information without impediments.
How do Blockchain Nodes Work?
Imagine a spider web where each intersection is a node within the blockchain. In our case, nodes communicate with each other in a peer-to-peer network, exchanging information and informing the network about users’ activity, adhering to blockchains’ consensus mechanisms.
Moreover, blockchain nodes help validate network transactions that involve smart contracts, executing their code and maintaining the state upon such commerce. This operation enables the automated functionality that smart contracts provide within blockchain networks.
Also, the nodes store the blockchain’s transaction history, creating a secure database. Thus, after each transaction is validated, they are moved into blocks that, in the end, piece by piece, are creating the blockchain.
There are ten types of nodes, each with a specific purpose.
These types of blockchain nodes store all the transaction data. Thus, they are considered the centralized server of the entire blockchain. Furthermore, the full nodes can be found on a consensus mechanism, such as Proof-of-Work or Proof-of-Stake, being included in the governance of the blockchain.
Also, a full node At this point, I would like to point out that a full node is further divided into two other categories, which we are discussing next.
As the name says, a pruned full node acts in a unique way whereby, depending on the storage space of the node, the node downloads the blockchain data, deleting older blocks and only keeping essential data.
Like pruned full nodes, the archival full nodes download and keep the entire blockchain database, as they don’t have specific storage space. Also, these types of blockchain nodes are the most used ones, and it is further divided into four other nodes: authority nodes, mining nodes, staking nodes, and master nodes.
- Authority Nodes
Authority nodes are used for managing the blockchain, being part of an authority-proof type of system. Furthermore, this type of node keeps the blockchain secure by limiting the access of unauthorized users tampering with the system. It achieves this by downloading and synchronizing blockchain data with the network.
- Miner Nodes
These blockchain nodes help solve complex mathematical problems by approving the transaction data. Miner nodes are an integral part of the blockchain that uses the Proof-of-Work consensus mechanism and can be found within Bitcoin. As you can already make the connection, running a node requires a lot of electricity and computing power to ensure its role.
- Staking Nodes
As the name says, staking nodes use Proof-of-Stake consensus to validate transactions, whereby users have to stake a certain amount of the native coin. The system randomly selects the node operators, and the staking nodes help to process transactions.
- Master Nodes
Found in Bitcoin and Ethereum, master nodes play different roles within the blockchain. These blockchain nodes can only validate and record new transactions, performing unique roles in blockchain government, but can’t add new blocks.
Often called Simplified Payment Verification nodes, SPV, a light node can operate on small devices with limited storage space because they don’t need to download the entire blockchain. Instead, they only download what is necessary for that specific transaction.
Also, light nodes can communicate and rely on the full node’s capacity to validate transactions and obtain the required information, providing a faster transaction speed.
Often called lightweight nodes, the primary function of a lightning node is to act as a decongestion on the blockchain. Since this network is above the blockchain, the lightning nodes enable an off-chain type of transaction validation, later being added to the blockchain. This blockchain node helps reduce the transaction processing time and the gas fee.
An excellent example of this case is the Bitcoin Lightning Network.
This is one of the rarest blockchain nodes, used only to perform specific tasks such as implementing or maintaining protocol changes.
Blockchain nodes reach consensus by following different mechanisms and protocols that ensure all nodes agree. Moreover, depending on the blockchain type, a particular consensus mechanism comes with its specifications.
For example, Bitcoin uses a Proo-of-Work consensus mechanism that uses computational power to solve complex mathematical problems and encrypted puzzles called the hash. After the hash is solved, Bitcoin’s PoW requires that every node operator check the data structure, block header stamp, and others.
A Proof-of-Stake consensus can be found in the Ethereum blockchain, which uses a different mechanism than PoW. In this case, users must stake their native coin to validate transactions and other changes.
For example, a node operator needs to validate a transaction. The system randomly selects him, and he must stake or lock in the required crypto coins. As a result of his efforts, he gets rewarded once a consensus is reached.
These are the most well-known consensus mechanisms found in crypto, and it’s a crucial step for ensuring the security of blockchain networks. This mechanism brings all the nodes to an agreement within the distributed ledger.
The blockchain node’s privacy, security, and anonymity are crucial aspects of ensuring the smooth running of the blockchain network. If a blockchain node is not anonymous, it periclitates the security of the blockchain, exposing them to cyber or malware attacks.
Moreover, since nodes are the base for building secure blocks, they have the mission to send and receive blockchain data between different devices.
The node’s privacy is also essential as it protects its users against identity theft and other scams, especially when using a third-party app. Yet, specific tools can be used to protect the node’s anonymity, thus remaining private and secure.
Now that we’ve learned about blockchain node, what it is, what it does, and how many types of nodes there are, it’s time to slowly move into discovering more about some of the most well-known cryptocurrencies, but this time through the lens of the blockchain node.
I’m sure that by now, you’ve wondered which currency has the most blockchain nodes. Well, let’s find out, and please remember that the more nodes can be found, the more decentralized the blockchain network is.
As guessed, the Bitcoin blockchain has the most nodes. Some speculate that it’s over 13,000 crypto nodes. On the other hand, the Bitcoin developer Luke Dash Jr. estimated that in January 2021, there were around 83,000 Bitcoin nodes, with a decline in 2022, reaching 50,000. But get this: in 2017, in the mists of the bull run, over 200,000 Bitcoin nodes were running.
Since blockchain nodes do not rely on a centralized authority to validate them, anyone can become node operators using the consensus mechanism. In theory, creating a blockchain node is straightforward.
It needs only three key components: the user’s computer, a stable internet connection, and the specific blockchain node software to download.
The chosen device needs enough storage space, especially if you select an archival full node that uses the whole blockchain, and usually, they upload a large amount of blockchain data.
Also, as debated already, nodes play a vital role in the health and growth of blockchain security, so anyone can support a crypto project by setting up a node.
For a user to run a blockchain node, there are four main requirements, such as:
Hardware Assets: A crypto user must have enough processing power and storage space to run a node.
Internet Connection: A stable and secure network connection goes a long way, ensuring the blockchain node is synced with the rest of the network.
Blockchain Software: It is essential to download and install the right software for that specific blockchain network. For example, you must install the Bitcoin core software to run a Bitcoin node.
Technical Knowledge: Last but not least, this is the ultimate step towards ensuring that the process runs smoothly and you know how to troubleshoot the node further in case anything goes south.
As blockchain technology gets increasingly adopted, it is essential to understand that blockchain nodes play a trivial role in the development underpinning the decentralized network and cryptocurrencies. You could say that blockchain nodes are the guardians of the digital realm, having multiple roles besides validating transactions.
In today’s world, as we navigate this ever-changing landscape, it’s becoming more and more evident that the influence and importance of nodes will expand even more, especially with the development of blockchain-based apps and Web3.
From full nodes to light nodes and Proof-of-Work to Proof-of-Stake consensus mechanism, each type of blockchain node plays a vital role, contributing to the resilience and diversity of blockchain network architecture.
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