Blockchain Network Nodes & Trust in Bitcoin


Jul 13, 2021
Blockchain Network Nodes & Trust in Bitcoin

Blockchain network nodes are points in a network where messages can be created, received, and transmitted. Nodes on the Bitcoin network can view, exchange, and verify information about transactions and add blocks by using the peer-to-peer protocol.

There are different types of nodes depending on the type of blockchain network, but broadly speaking they can be categorized into three categories based on their particular functions: full, light, and miner nodes.

Full Nodes
Their responsibility is to validate transactions and blocks as well as relay and transmit these from other full nodes to support the blockchain network. Essentially they support and provide security to the blockchain network, and hence are indispensable to the network. So, in other words, they verify that transactions and blocks are legitimate, specifically that there is no double-spending (i.e. no stealing) and simultaneously communicate to other full nodes that these are eligible transactions. This is done by validating transactions and blocks against the system’s consensus rules (i.e. protocol).

Full Nodes of a blockchain network keep a copy of the whole blockchain — a full copy or a reduced copy are equally effective. The most popular software used to run a full node is Bitcoin Core. Specialized hardware is not required to run Bitcoin Core. The only prerequisite is a 200GB free disk space and a 2GB RAM memory. Other requirements include high-speed internet connection as well as an unmetered connection or high upload limit. Full nodes should run a minimum of 6 hours a day, but 24/7 is ideal. Essentially anyone can run a full node on a PC at home.

Light Nodes
One can think of light nodes as the lighter, simplified version of a full node. They do not keep a copy of the blockchain, so they do not have access to the full history of transactions, but only the most recent ones. Also, light nodes do not communicate with other nodes on the network, so they can be thought of as endpoints. Therefore they also don’t contribute to the network’s security, as they don’t validate or verify transactions and blocks.

So why do light nodes exist one may wonder. Light nodes can be used to check if a transaction was included in recent blocks without having to download the full blockchain transaction history. So, for example, they represent a user’s cryptocurrency wallet on their mobile device where the user can check whether the transactions that they completed went through or not.

Miner Nodes
Miner nodes are the nodes that add transactions to the blockchain, and to do so they have to follow the protocol. For instance, in the Bitcoin network, miner nodes have to solve the proof of work (PoW) problem in order to add new blocks to the blockchain. When a miner node successfully solves the proof of work problem, they receive rewards. However, this is a difficult and competitive process, as it requires extensive computing power. Thus, miner nodes must invest in specialized mining hardware and programs in order to be competitive. Miner nodes can work alone (solo miners) or in groups, which has given rise to what is known as mining pools.

Mining pools
Mining pools are formed by miner nodes working together to combine their computational resources (hashpower). Specifically, they will be organized by the pool’s coordinator in such a way that each miner tries different nonces so that hash power is not wasted by miners trying out the same nonces to create the next block. This is done to increase the chances of successfully mining a block, which in turn reduces risk in mining. Therefore, this is beneficial for risk-averse miners seeking to earn a steady income.

Trust in Bitcoin
As nodes communicate with each other through the protocol, they guarantee the integrity of a distributed system such as the Bitcoin network. If a node misbehaves by attempting to propagate incorrect information, the network quickly recognizes that dishonest activity and disconnects that node from the network. To date, no such malicious activity has been found within the Bitcoin blockchain network.

Running a full node does not provide financial rewards like running a miner node does. However, running a full node is crucial because it maintains the trust, security, and privacy of the blockchain network. In other words, full nodes ensure that the protocol (i.e. the rules of the network) is being followed, and hence protect the blockchain network against attacks or fraud such as double-spending. Finally, nodes do not need to trust each other, they only need to trust the system and respect the protocol, which is essentially why there is increased trust in decentralized and distributed systems such as Bitcoin.

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