What are Blockchain Nodes?

Blockchain nodes are vital constituents of a blockchain network. They represent a computer or device connected to the network, actively engaging in the arrangement, verification, and validation of transactions. In essence, nodes play a crucial role in guaranteeing that the blockchain serves as a secure and dependable ledger, documenting all transactions conducted on the network. Their primary function is to contribute to the overall security and integrity of the blockchain system.

On a blockchain network, diverse types of nodes exist, each with its own distinct roles and responsibilities. Certain nodes are tasked with retaining a complete copy of the entire blockchain and authenticating transactions according to the consensus rules inherent to the blockchain. Others bear the responsibility of confirming and incorporating new transactions into the blockchain. Additionally, there are specialised nodes configured to undertake more intricate functions on the blockchain, such as executing smart contracts or acting as reliable intermediaries for specific transactions.

Irrespective of their particular role, all blockchain nodes collaborate to uphold the integrity and security of the blockchain. They communicate with one another, exchange information regarding new transactions and blocks, and employ the consensus rules of the blockchain to authenticate these transactions and append them to the blockchain.

This article addresses a crucial question: what is a blockchain node, and what are its functions? Let's delve into the discussion.

What is the Importance of Blockchain Nodes?

The increasing popularity of blockchain technology in recent years and its widespread adoption across various industries, including supply chain, healthcare, energy, etc., is poised to persist with technological advancements. Hence, it is crucial to comprehend the fundamental infrastructure and architecture underpinning blockchain technology to grasp the dynamics and utilities that render it superior to its conventional counterparts.

Nodes serve as the backbone of a blockchain's infrastructure. Their primary purpose is to bolster the security of the data on the blockchain and establish credibility within the network. A blockchain network can encompass thousands of nodes, ensuring decentralization, immutability, and traceability. Nodes contribute to reliability by preserving all transactional records on the blockchain. Furthermore, nodes play a role in safeguarding the blockchain against centralized attacks, as there is no single point of failure within the blockchain network. Each node possesses a copy of the blockchain database, using it to authenticate transactions and incorporate them into the blockchain as blocks. Consequently, the broader the node network, the more dependable the blockchain becomes.

Nodes have a range of uses on the blockchain, including organizing, overseeing, and documenting blockchain transactions, as well as refusing and storing data while upholding the consensus algorithm. Furthermore, nodes are tasked with ascertaining the legitimacy of a block of transactions or signatures and subsequently approving or disapproving it to maintain the seamless operation of the network.

How do Blockchain Nodes Operate?

Now that we have explored what a blockchain node is, it is equally crucial to comprehend how nodes operate. To do so, it is first necessary to revisit blockchains and understand their functioning. Blockchains represent a shared, immutable ledger where each block is cryptographically linked to the next. In this structure, any alteration in one section of the blockchain would result in subsequent blocks undergoing changes. Nevertheless, these blockchains exist on a distributed network and have multiple copies, implying they are not susceptible to alteration.

Nodes possess distinct characteristics or features that set each one apart from the others. Their functions can vary depending on the application. While it is commonly stated that a node is responsible for maintaining blockchain transaction records, as mentioned earlier, this isn't the case for all nodes. The specific role of a node is contingent on the overarching requirements of the blockchain. Each node fulfils a different role in the blockchain ecosystem, in addition to the standard responsibilities of transaction management, data sharing with other nodes for network expansion, and the implementation of an algorithm to keep the entire network current and operational.

There are also specialised types of blockchain nodes known as RPC nodes that are configured to handle more intricate tasks on the blockchain, such as retrieving smart contract transactions or acting as trusted intermediaries for specific transactions. These nodes typically possess substantial computing power and resources and are often operated by large organisations.

Different Types of Blockchain Nodes

The distinct types of blockchain nodes and their functions across various blockchain layers are a crucial aspect of comprehending what a blockchain node is.

1. Full Nodes

A full node stores the entire blockchain, enabling them to fully validate transactions and blocks against the network’s consensus rules. Moreover, full nodes play a crucial role in disseminating this data throughout the network, ensuring the prompt and efficient distribution of new transactions and blocks. However, full nodes typically refrain from proposing new blocks for inclusion in the blockchain. By operating a full node, participants can independently and authoritatively verify any transaction in the blockchain’s history without relying on external references. This self-sufficiency ensures that the network remains decentralised and resistant to malicious actors or single points of failure. Ethereum’s Geth is a popular client and software implementation for running full nodes.

Full nodes, furthermore, play a significant role in the governance of blockchain networks. When protocol changes or updates are proposed, the decision of full nodes to adopt or ignore these changes becomes a powerful signal of consensus. By choosing to update their software in response to these proposals, full nodes effectively voice their stance, shaping the direction of the network’s evolution. Their role is not merely passive; full nodes actively enforce the network’s rules. If a majority chooses to adopt a change while others don’t, the latter may find themselves on an incompatible chain, illustrating the node’s pivotal role in realizing governance decisions.

2. Archive or Archival Nodes

An archive node, on the other hand, is a specialised form of a full node that goes a step further in its data retention. Beyond storing the complete blockchain, an archive node meticulously retains the entire historical state of the network, capturing every intermediate state between blocks. This means that for every action, be it a transaction, contract execution, or any other activity, an archive node captures and preserves the resultant change. It’s akin to having a snapshot of every moment in the blockchain’s history, allowing developers to rewind and scrutinise any moment of interest.

For projects that necessitate a thorough examination of historical data or debugging complex smart contracts, an archive node is an indispensable tool. However, this depth of information does come at a cost, as the storage requirements for an archive node far exceed that of a regular full node, necessitating substantial infrastructure and investment to maintain effectively. Again, anyone can run an archive node on permissionless chains.

3. Validator Nodes

Unlike traditional full nodes that primarily validate and relay transactions, validator nodes (also referred to as staking nodes in some networks) take a more active role in the block creation process. They are chosen based on various criteria such as the amount of native cryptocurrency staked, reputation, or other factors to validate and append new blocks to the chain. By proposing or validating new blocks, these nodes help achieve consensus on the next state of the blockchain. In blockchain networks like Shardeum, validator nodes take on a multifaceted role. When it’s their turn, they individually validate, achieve consensus on, and process transactions in a leaderless manner. Once these transactions are validated, the network aggregates them into batches or blocks. These consolidated groups of transactions are then relayed to archive nodes within the network for comprehensive storage and historical record-keeping.

All said, the above-mentioned statements are based on the assumption that validators act honestly. If they engage in malicious activities or incorrectly validate transactions/blocks, they face stringent penalties, often termed as “slashing,” which could lead to the forfeiture of their staked assets. As such, validator nodes represent a blend of trust and authority within certain blockchain ecosystems, ensuring network integrity while also fostering decentralisation.

4. RPC Nodes

RPC nodes, or Remote Procedure Call nodes, serve as vital access points within a blockchain network. They facilitate external interactions with the blockchain by processing requests and executing specified functions. Developers, applications, and other network participants communicate with RPC nodes to retrieve data, send transactions, or query the state of the network. These nodes interpret and relay these external requests to the blockchain and then return the appropriate responses. While not directly involved in consensus or block validation, RPC nodes play a crucial role in bridging the gap between external entities and the underlying blockchain infrastructure, making the network more accessible and usable for a wide range of applications and services. Their presence underscores the importance of accessibility and user-friendliness in advancing blockchain adoption.

5. Pruned Full Nodes

Pruned nodes, in their core functionality, closely mirror full nodes, but they adopt a more storage-efficient approach. Rather than retaining the entirety of the blockchain, they prioritize recent blocks, shedding older data to remain within a designated storage threshold. Initially, a pruned node will download the blockchain, but as it operates, it systematically discards older blocks, ensuring only the most recent data aligning with its set storage parameters is preserved. For example, if an operator allocates 550MB for a pruned node, it will maintain the latest blocks that fit within this constraint, pruning away older data as necessary. Notwithstanding their leaner storage methodology, pruned nodes retain the full-node capability to authenticate transactions and partake in consensus procedures.

6. Authority Nodes

An authority node is one chosen by the organization or community in charge of a blockchain. They are used to authorise new nodes to join a blockchain network. They can also manage other nodes’ access permissions in case they want to reach a specific data channel. Consensus algorithms that are not fully decentralised, such as Delegated Proof of Stake and Proof of Authority, use authority nodes. Such consensus algorithms require a fixed number of authority nodes to function. The number of authority nodes and who they will be is usually voted on by the community or determined by the development team. Other participants in the network will be running lightweight nodes, which rely on the information broadcasted by the authority nodes to operate on the blockchain. Authority nodes add a level of centralisation to the network to increase speed, but they also introduce the possibility of centralised control.

7. Miner Nodes

A mining node (or miner) is a node designed specifically to carry out the mining process. With Proof-of-Work, for example, the first miner to solve a computer puzzle receives the right to confirm a block of transactions. Mining nodes employ high-performance computing systems that include CPUs, GPUs, or ASICs to solve the puzzles, allowing them to add new blocks to the blockchain. A mining node can be made up of a single miner or a mining pool.

Miners are one of the various types of nodes in the blockchain (either full or lightweight) that strive to demonstrate they have completed the required work (puzzle) to create a new block on the blockchain. Once a miner has solved the puzzle, they broadcast the solution to the network to be verified by full nodes. If consensus is achieved, the miner is granted the right to add a new block to the blockchain and is rewarded with a pre-defined amount of cryptocurrency coins, as well as any transaction fees associated with the block.

8. Masternodes

Masternodes are full nodes responsible for maintaining the blockchain ledger and validating transactions. However, they cannot add new blocks to the blockchain. Generally, masternodes are more powerful than regular nodes. Depending on the nature of the event, masternodes may also assist in other events on the blockchain. These include managing voting events, providing protocol execution, and enforcing the rules of the respective blockchain.

While masternodes do not have the same role as full nodes in adding new blocks, they still play an important role in the operation and security of the network. By running a masternode, users not only contribute to the security of the network, but they also have the opportunity to earn a share of the rewards for their services. To set up a masternode, users must lock away a certain amount of funds as collateral (similar to validator and staking nodes) and ensure that their node is online 24/7. Hosting a masternode on a virtual private server is considered good practice, as it helps ensure the availability and reliability of the node.

9. Lightweight Nodes

This type of node can only download and store block headers. Simply put, they provide only the information required to support daily activities or faster transactions. They are not involved in the block validation. Simplified Payment Verification nodes (SPV nodes) are another name for these nodes. These types of blockchain nodes communicate with the blockchain but rely on full nodes to provide them with the necessary information. As they do not store a copy of the blockchain, they only query the current status of the chain and broadcast transactions for processing. They save users a significant amount of time and storage space.

10. Lightning Nodes

Lightning nodes are special types of blockchain nodes that allow users to establish a connection outside of the blockchain to facilitate faster and cheaper transactions. They are typically used in networks that leverage state channels, which is a layer 2 scaling solution atop layer 1 blockchains. This setup – both nodes and the state channel client software – work by creating a separate payment channel between two entities, such as a shop and a customer. The entities create a multi-signature address, like a safe-deposit box, to which they both have access.

The customer deposits funds into the channel and uses them to pay for goods or services from the shop. Each transaction is agreed upon by both parties and happens almost instantly. When the customer is finished making purchases or runs out of funds, the payment channel can be closed, and the final balance is broadcasted to the blockchain. This process reduces the load on the blockchain and shortens transfer times because it allows parties to interact directly without the need for each transaction to be confirmed on the blockchain. In addition, the lightning network will search for the most efficient path for transactions, with the least number of intermediaries and lowest fees, to further reduce wait times.

11. Super Nodes

Super nodes are an important part of some blockchain networks because they provide additional functionality and support. These nodes are often used to perform specialised tasks that are critical to the operation and maintenance of the network. For example, a blockchain might use super nodes to enforce network regulations or to implement upgrades.

Unlike full or lightweight nodes, which are more common types of blockchain nodes, super nodes are not as widespread, and their roles and responsibilities may vary from one network to another. Despite their specialised nature, super nodes play a vital role in the operation and success of many blockchain networks.

Conclusion

Blockchain nodes are one of the most integral aspects of the blockchain network, and understanding them is important if you plan on entering the world of crypto and blockchain. As discussed above, there is a wide variety of nodes, and each performs distinct functions to keep the blockchain functioning smoothly. A blockchain architect, UX developer, or someone else more closely aligned with the making and running of the blockchain would require more technical knowledge about making, setting up, and running nodes, but the focus of this article was to provide an outline of what is a blockchain node to help you develop a better understanding of the decentralized world and how it is convened over a network of computers.

Frequently Asked Questions (FAQs)

1. What are the Steps to Set up a Full Node?

Setting up a full node can seem complex, but it is a relatively simple process when broken down into separate steps:

• Choosing a blockchain to set up and run the node in, such as Bitcoin or Ethereum

• Acquiring the software and hardware equipment required for deploying a node and subsequently running it, which would differ for every blockchain and cryptocurrency

• Getting the suitable hardware, which involves a small computer known as Raspberry Pi

• Executing the node.

  2. How to Run a Full Node?

  To understand how to run a full node, it is first important to know that full nodes can be hosted on cloud platforms, such as Google Cloud or Amazon Web Services, or on a device with enough RAM and hard disk space to support it. It is also vital to make the most of node solutions by growing from one base.Once a node has been set up, it is also essential to keep a check by monitoring and maintaining it as and when required to avoid faults in the blockchain.

  3. Is Hosting a Node in the Blockchain Profitable?

  A well-maintained node in a blockchain can be profitable and a source of passive income. The node operator may earn coin rewards and benefit from the price appreciation in the future. However, setting up and running a node can be expensive depending on the hardware requirements of each blockchain network. Profits also depend on which type of node you are running, with some being more profitable and sustainable than others. When it comes to investing your resources in anything, including running nodes, always make sure to Do Your Own Research (DYOR).

  4. How many Nodes can a Machine Run?

  The number of nodes a machine is capable of running is entirely dependent on the capabilities of the hardware system of that machine. On a single machine, you could choose to run a single wallet or increase that number by using virtual machines. However, it is important to ensure not to exceed 85% of the available server resource unit if using a virtual private server since you could run into trouble with your providers.