What do you know of Blockchain Infrastructure? What about Node?
Welcome to another Educate and Sharing session made by Blockchain Army. This time, let’s find out the definition, types, and use cases of Nodes. And of course, how to earn money by running nodes.
I. What is a Node?
According to Blockchain Council, nodes are network stakeholders and their devices that are authorized to keep track of the distributed ledger and serve as communication hubs for various network tasks.
A blockchain node’s primary job is to confirm the legality of each subsequent batch of transactions, aka blocks. In addition, allocating a unique identifier to each node in the network helps to distinguish a node from other nodes in the network easily.
Basically, nodes enable cryptocurrencies to operate as a decentralized, P2P payments system with no single point of failure or central authority.
Or we can describe Blockchain as a Network of Nodes.
II. What are the benefits of running nodes?
Each blockchain offers lots of benefits in running nodes. For a typical chain, Bitcoin, there are 5 benefits below:
- Direct Access to Transaction Data: Running a full Bitcoin node increases the security of a transaction. If you make multiple transactions per day, you can access up-to-date information about your transactions directly from the Bitcoin blockchain.
- Strengthening the Network: You can enforce Bitcoin consensus rules and have the power to reject a transaction that violates the rules. The more copies of the Bitcoin blockchain, the more resilient the platform will be. Thus, you will also contribute to improving security, but also strengthen the Bitcoin network.
- Proprietary Knowledge: If you are a trader or holder, you can monitor for large transactions that can move the market. In fact, a research paper published by Lennart Ante recommends that traders should run a Bitcoin node themselves to assess the market.
- Privacy: Outside of Nodes, Bitcoin transactions are processed through a third party. People who are very concerned about their privacy should run Bitcoin nodes of their own to take full advantage of Bitcoin’s privacy system.
- Governance: In the event of a hard fork, bitcoin full nodes have the option to choose which chain to join. So, if you run a full Bitcoin node, you can get involved in the governance of the Bitcoin protocol. Read more about forks here.
III. How many types of Nodes up to now?
In general, we can look into the very first blockchain – Bitcoin – to have nearly full types of nodes. The reason is that many other blockchains use a similar format to the Bitcoin node structure.
- Full node: A full node or “archival” node is a node that hosts the entire blockchain and stores every transaction on its database. Moreover, full nodes validate blocks and maintain consensus throughout the network. Plus, some full nodes can append blocks of transactions to the blockchain. In addition, full nodes enable lightweight nodes to broadcast transactions to the network without downloading the entire blockchain.
- Lightweight node/SPV (Simple Payment Verification): Lightweight nodes communicate with the blockchain while providing them with the necessary information. Since those nodes don’t store a copy of the entire blockchain, they just query the current state to process transactions.
- Pruned node: Pruned nodes reserve disk space by removing blocks, starting with the oldest first. After downloading the full blockchain, pruned nodes delete old transactions until they are left with only the most recent ones.
- Master node: Master nodes validate and record transactions onto the blockchain. Unlike full nodes, they cannot append blocks to the blockchain. However, owning master nodes can earn network rewards.
- Mining node: Mining nodes are used for generating new blocks.These nodes can be either full or light nodes and often require considerable amounts of energy to mine transactions by doing specified tasks.
- Staking node: Staking nodes play the role in validating transactions throughout a blockchain network to uphold the consensus mechanism. Validators can earn through proof-of-stake (PoS) consensus mechanism.
IV. How to earn by running nodes?
There’re few things you need to prepare before running nodes:
- Hiring a Virtual Private Server (VPS)
- A workstation/laptop to run node
- Basic knowledge in coding and network
- Research the chain that you want to run nodes on
Steps of running nodes:
You can start by hiring a VPS to secure the blockchain. Most blockchain now are low-secured, that’s why they require VPS to run nodes.
Next step, make sure that your equipment hardware meets the requirement to run nodes (the requirements are usually offered by the blockchain owners).
You should install tmux, so that the process of running nodes will continue even when your equipment shuts down.
After setting up VPS, and installing tmux, you can start running nodes by following the instructions from the blockchain’s developers. For example: Running an Aptos node.
Nodes are an essential element of blockchain. They ensure that the entire network runs smoothly and that everyone follows the rules. If a node acts maliciously or dishonestly by spreading false information, the rest of the network can quickly identify the offending node and exclude it from the network.
To start running a node, you must have a deep research on the blockchain that you want to run on and what is the reward of running nodes on that chain. For example, chains with PoA (Proof of Authority) like BSC or OKEX require you to be well-known to run their nodes. Or like other chains with DPoS (Delegated Proof of Stake) based on tokens staked amount, only Top Holders can run.
So the solution for you are the brand new chains or chains with PoS (Proof of Stake), which do not require large staked tokens.