Understanding Blockchain Nodes
Blockchain nodes are computers and similar devices that can provide processing power for the blockchain network. Their role is to maintain and validate the distributed ledger. As such, they are a vital part of the blockchain infrastructure. They also power the consensus mechanisms, so they maintain the blockchain’s security, integrity, and decentralization itself.
The more nodes there are, the more decentralized a blockchain is, as each node represents an individual device. These devices are spread all across the world, making them impossible to hack all at once and endanger blockchain’s security.
What are Blockchain Nodes?
Many do not understand what are blockchain nodes, so the simplest explanation would be that they are computing devices, or hardware systems, used to run the blockchain software. Each of the nodes stores its own copy of the distributed ledger, which is why it is impossible to make false entries onto the blockchain.
If the majority of them have one information, that information is considered the truth and is recorded on all the nodes. This is what decentralization is all about, as there is no single entity that establishes the rules or dictates what is true or not — instead, it is decided by the recorded data that is approved by the consensus mechanism.
How Do Blockchain Nodes Work?
Blockchain nodes’ primary functions include data validation and network verification. The process starts when they receive the data, which typically travels broken into small packages. When it arrives, the node performs validation checks to make sure that the data is in line with the rules of the blockchain, and that it is safe to proceed.
This is done through digital signatures, balance checks, prevention of double-spending, and formatting. If the data is deemed safe and in line with the rules, the network’s consensus mechanism comes into play, and it ensures that the transaction is recorded on the blockchain as truthful, and added to all the nodes’ individual copies of the distributed ledger through a process called ledger synchronization.
Types of Nodes in Blockchain
There are four different types of nodes in the blockchain — full nodes, light nodes, mining nodes, and masternodes. Each of them plays a different but vital role in the blockchain, so it is necessary to have multiple types.
Here is what you need to know about each of them:
Full Nodes
Full validation nodes, or full nodes for short, are the nodes that actually download and store a copy of the blockchain ledger. They contain the complete transaction history of the blockchain, allowing you to view every transaction ever made. They show the details of each transaction, such as where it came from, where it went, how much money was transferred, how much was the fee, the exact time and date of the transfer, and alike.
Having this data can be crucial in proving that transactions were made, and they eliminate the need to trust another party. With all the data available, you can easily prove or disprove a claim, so trust is unnecessary.
Light Nodes (SPV Nodes)
Next, there are light nodes, also known as lightweight or SPV (Simplified Payment Verification) nodes. These nodes are used to store only the most essential data, instead of storing the entire copy of the blockchain, like full nodes do. This makes light nodes dependent on the full ones for the details, as they only download and store the most necessary information.
Their purpose is to operate quickly while using minimal resources, but because of this, they are only capable of performing partial validation.
Mining Nodes
Mining nodes are what most crypto users are familiar with. These are the nodes used for block validation and for performing the mining process. They are used in Proof-of-Work blockchains, such as Bitcoin or Dogecoin, and those who operate them are known as blockchain miners.
Essentially, they are used to process transactions and record them on the blockchain. Whenever a group of transactions is processed, they are stored in a new block, and are then considered “solved.” The block is added to the chain, and the miner receives a reward in the form of newly mined cryptocurrencies that were not in circulation up to that point. As such, they are essential for releasing new coins into circulation, but also for completing transactions.
Masternodes
Cryptocurrency masternodes are a type of full node, meaning that they store the entire blockchain ledger. However, they also differ from regular full nodes, as they are used to perform functions that go beyond basic validations.
They can be used to enhance network security, and are often used for decentralized governance. They also typically require that their users deposit a certain amount of crypto as collateral, which ensures trust — with money to lose, it is less likely that the masternode operator would perform actions that might harm the blockchain.
There are still masternode rewards that the operators receive for their services, which gives them a reason to operate the node for long periods of time.
Key Functions of Blockchain Nodes
As we have seen, there are several different types of nodes in blockchain that help the system operate by working together, but also by performing different services within the network. However, their key functions include maintaining the ledger and verifying transactions.
Maintaining the Ledger
As discussed previously, the nodes are crucial for record-keeping and maintaining the blockchain database. Each of the full nodes and masternodes maintain an entire copy of the transaction ledger and can ensure that it will remain immutable by only recording verified information that is truthful and accurate.
This ensures that the data is safe and that the blockchain remains healthy and strong. As a result, it is important for the blockchain to maintain a high number of nodes, as the more of them there are, the healthier, safer, and more decentralized it gets.
Verifying Transactions
Nodes are a crucial tool for transaction verification within the blockchain. They power the blockchain’s software and use cryptographic checks to verify that the data that is getting processed is accurate and true.
After that, consensus algorithms are used to perform additional checks and group transactions into blocks, which are then stored and added to the chain.
The Role of Nodes in Blockchain Security
As mentioned earlier, having different types of nodes in blockchain, and having plenty of each type, also increases blockchain security.
With many nodes available, operators can contribute to 51% attack prevention. This is a type of attack where bad actors try to overtake the blockchain by taking control of 51% of nodes. That would give them the majority and power over deciding what will be stored on the blockchain as true.
However, with the nodes being spread around the world, the more of them there are, the more difficult it becomes to hack the necessary half, or rather, 51%. In other words, having a high number of nodes directly contributes to the network robustness and security.
Setting Up Blockchain Nodes
If you wish to create blockchain nodes, this can seem like an intimidating process. But, if you break it down into several steps, it is quite doable.
- Step 1: The first step is to obtain the necessary hardware, including storage, strong, reliable internet, and processing power.
- Step 2: Once you handle the hardware, you will also need to tackle the software by downloading a specific blockchain client, depending on which network you wish to run a node for.
- Step 3: Make sure to secure your device using strong antivirus and antimalware software, strong passwords, and potentially even a VPN.
- Step 4: Once you install the blockchain software, you will have to download the blockchain ledger in order to be in sync with the rest of the chain, and customize settings in configuration files.
- Step 5: The final step is to remember to constantly manage your node. Make sure that your blockchain client is regularly updated, that the security is on point, and that your storage and internet connection remain adequate for the purposes of running a node.
Requirements for Running a Node
Blockchain node setup does require a certain amount of technical knowledge. You need to have an understanding of online security, blockchain basics, and basic networking. Also, it is good to have troubleshooting skills, so you can quickly tackle any potential issue that might emerge along the way.
But, apart from that, there are also software and hardware requirements for running a node. In terms of hardware, you need a strong device with a lot of processing power, storage, and a strong internet connection, where the internet needs to be fairly fast, with unlimited bandwidth.
As for software, you need to get the blockchain client which is easy enough to obtain, but you must also secure it with firewalls, antivirus and antimalware software. Some monitoring tools might also be good to have just to keep an eye on your node’s performance.
Challenges and Limitations of Blockchain Nodes
Finally, note that running a node may also come with certain challenges and limitations. One of the most commonly recognized issues is the high resource requirement. We talked about great hardware requirements for running a node, as you must ensure proper storage, strong bandwidth, fast speeds, and a lot of computational power.
Network latency issues are also common, and you must actively keep an eye on security. All of this can pose quite a big financial issue as well, not only due to hardware and software expenses, but also because running a node comes with high energy consumption. Finally, technical knowledge is also required, which prevents those who do not have a certain understanding of computing from running a node.
