Please click the link below to listen to the 52nd episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere.
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Key Concepts 9 – What is a (Bitcoin) Node?
Welcome to Two Minute Crypto. This episode of the Key Concepts Series examines blockchain nodes and attempts to explain their role in a typical chain with as little jargon as possible. While there are different implementations of nodes across blockchains the underlying role of such nodes is generally the same. As Bitcoin is by far and away the most distributed example of a blockchain system – its node structure will be referenced.
What is a node?
A node is simply a full digital record of all previous transactions on a blockchain network which participates in the network by processing transactions and blocks in accordance with the rules encoded in that system. Each and every entry on the blockchain is stored on this point of reference.
Taking Bitcoin as an example, it is possible for any individual to download a copy of Bitcoin core and store it on their computer. Currently, this digital copy of all previous interlinked blocks is about 250GBs. It is further possible for that record to interact with the Bitcoin network to ensure that new transactions are valid and that they adhere to the rules or consensus mechanism of BTC – this is a node. A record, a ruleset, and a connection. Bitcoin nodes do not operate for profit as the record validator is not paid a fee.
A node, therefore, is essential to the security and operation of a blockchain. The greater the number of nodes the wider the distribution of a chains record and the more resilient it is. More points of reference equal greater network information integrity.
Why run a node?
Well, first and foremost, you are helping to secure the system you wish to use. Secondly, by running a node you have the ability to participate in verifying your own transactions and therefore remove all trust from your use of the network. Of course, your node needs to communicate with the rest of the system but you are assured of the validity of your transactions as you already hold a trusted record of the blockchain.
Bitcoin is often touted as the most robust blockchain system – its widely distributed node network is a key attribute of its security. While it’s impossible to get a completely accurate number for currently operational nodes – there are at least 10 thousand and growing.
It’s important not to confuse nodes with miners. Nodes hold records but miners solve the cryptographic computational problem that allows the addition of new blocks to the chain. Mining requires highly specialized equipment such as ASICS and is an energy-intensive process. Miners are paid a fee for doing so. Nodes, in contrast, operate on normal consumer-grade hardware and may operate in the background. In Proof of Work networks such as Bitcoin, it is the synergy of nodes and miners that process, validate and protect the network.
Thanks for listening.
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