What are nodes?

• A node is a device that is an independent unit

• A node tracks blockchain

• Nodes communicate in a common language

• Nodes ensure blockchain is always online

• Nodes, validators, miners

What are nodes?

Definition:

A node is a device that is an independent unit.

Node is often referred to as node, branch or connection.

In the computer science world, as in a blockchain, these nodes communicate with each other to achieve a particular goal, such as consensus on the validity of a block in a blockchain. There are also much simpler nodes to think of, such as hubs, which simply allow parts of an entity to communicate with each other, such as your PC.

Think of a node as a tree structure like a family tree, where a node connects different parts of the tree diagram and enables communication or itself communicates with the branches.

Nodes are used in a variety of constructions, but their main task is always to connect different parts of a larger whole, such as a network, a collection of data or a blockchain. Outside of this bigger picture, nodes cannot function. For example, you cannot connect a Bitcoin node to the Ethereum network.

Without certain nodes, cryptocurrencies could not exist, because then no one would know what the blockchain should look like. Starting with the genesis block of a blockchain, nodes keep track of exactly which blocks have all been created, how many coins everyone has and what the next block should look like. Without nodes, no one would want to participate in a blockchain and no one would buy a cryptocurrency. So nodes are essential to the security and integrity of a blockchain.

Where did the idea of nodes come from?

In the 1960s, Paul Baran and Donald Davies came up with an idea they called packet switching. A packet has a header and a payload. Baran wanted to invent a fault-tolerant routing method for telecommunications messages. With packet switching, data were grouped into a packet and sent over a digital network. This became the basis for data communication in computer networks around the world.

Some of these terms are very familiar in the world of blockchains.

It was used in ARPANET (precursor to the WWW and Internet) and eventually led to the node, which can send and receive information in a distributed network. Because a node is replaceable, the loss of a node has virtually no impact on the overall network. This gives a distributed network its strength, as it is virtually impossible for it to fail because of this.

How do nodes work?

If you are going to build a network of different devices, you can only do that if they have a common language. If you are going to create a network of computers and devices, they must all conform to the computer language devised for them, such as an IP address. Protocols like TCP/IP and other commonly used protocols in computing must be pre-programmed into these devices, otherwise communication between the nodes is impossible.

In the world of blockchain and cryptocurrency it works no differently. To work as a node in a blockchain, you must download the rules of that blockchain and install them in your node. Only that way are you able as a node to determine whether a block in that blockchain is valid or faulty.

This is how a blockchain works with a consensus protocol. Consensus is a fancy word for agreement. If a node knows the rules of a blockchain network, it can apply them. Since all other nodes have the same ruleset, reaching consensus is usually easy.

Once there is no consensus a majority is used. If more than 50% (in most networks, some networks work with different numbers) of the nodes approve a block it will be immutably recorded in the blockchain. It is always necessary to force consensus, otherwise the blockchain would crash. In almost all cases, consensus is enormously high because it is rare for weird things to happen on a blockchain.

Such a rare case would be, for example, if two miners simultaneously found the solution to a cryptographic puzzle when mining in a Proof of Work network. Then 1 is out of luck, because the longest chain is always seen as the correct one in a blockchain, and once one is accepted by a node, the other is automatically considered incorrect.

Once a block is accepted, a time stamp and a hash the properties of a block permanently defined so that all nodes know what the new state of the blockchain is.

Why are nodes used in a blockchain?

A blockchain could be described as a distributed database. In other words, it is a collection of data shared by participants in that blockchain.

So when you join such a network you become a node. You then normally download the entire database and start maintaining it yourself.

Decentralization is an important word in blockchain technology. By this is meant that not everything is kept on 1 or a few computers, but on a whole battery of computers. The more computers that keep track of a network, the more secure a blockchain is.

Just imagine if there were only 1 computer to keep the full copy of the Bitcoin database. The moment the power goes out or the computer is turned off everything is at a standstill. Then not even trading in this cryptocurrency would be possible. The same goes for a network of only a few nodes.

Then you also have consensus. Suppose there were only a few nodes, they could work together to approve transactions that, while not correct, were to their advantage (such as double spending), corrupting the database.

If there are very many nodes that are also spread around the world, there will always be more than enough reliable nodes left to maintain a correct database in all circumstances (except when there is no more power anywhere).

The longer cryptocurrency exists, the more secure and robust their blockchains become, as more and more nodes are added to maintain the database. Since cryptocurrency is now no longer child's play, nodes have taken on a very important function in the world of crypto.

The difference between nodes, validators and miners

Nodes

To make it all a little easier, developers and other hotshots are constantly inventing new terms for what are, in fact, nodes. We'll list them for you so you have a little overview and don't end up in Babylonian confusions:

1. The node. This is the general term for a node. You now know what that is.

2. The full node. This is a node that usually has to use special software to download and verify the full blockchain. This is common with Bitcoin, for example. These nodes verify that a transaction is valid.

3. The light node. It does not need to download the entire blockchain and is connected to full nodes. It does only part of the work that a full node does. You almost never get a reward for this.

4. The master node. These are the most important nodes of a blockchain. Usually you need to download a solid number of coins of their cryptocurrency and run heavy software. You almost always need a permanent connection to the Internet and a specialized computer. Master nodes communicate with other master nodes to keep the network as secure as possible. If you go wrong as a master node then a hefty penalty follows, which they call a slash. In that case, you can lose the entire collateral as well as your role as a master node. Master nodes are paid for this work. DASH came up with this concept.

5. The super node. It must perform very specific tasks, such as implementing upgrades and updates and enabling things like side chains or applications to run on a platform. They are also often responsible for the infrastructure of a blockchain. They are somewhat similar to master nodes, as you usually also have to have a decent amount of coins as collateral and you can be fined if you are not online enough time (usually close to 100% or all the time). This is not surprising since they make sure the blockchain is working properly. They also get rewarded for their work.

Validators

Validators must validate transactions sent by participants in a blockchain network. They do this by adhering to the consensus mechanism associated with a blockchain. Once a network's validators have reached consensus (agreement) on a block in a blockchain, they will approve the block and add it to the blockchain.

Validators are usually found in a Proof of Stake network. Participants must then stake the cryptocurrency of such a blockchain and receive rewards for doing so, which vary from blockchain to blockchain. These validators must stake quite a few coins and keep tremendously reliable records of the network, or a hefty fine and the end of their validator career will follow. They do watch out for that. Generally, individuals stake at a delegated staker because it is all a bit technical in nature and there are too many things to watch out for. The most well-known form of this is when an exchange plays the role of delegate in a Proof of Stake network and traders on a platform stake coins and get a large portion of the proceeds from their delegate, the exchange.

This is also what makes Proof of Stake so reliable: a validator has a huge economic interest in validating all transactions correctly, so a validator makes sure it does.

Miners

This has traditionally been the best-known form of a node because Bitcoin works with it. These are nodes in a Proof of Work network.

Miners use usually very expensive hardware, such as ASICs (application-specific integrated circuits) that specialize in solving cryptographic mathematical puzzles that belong to a particular network. For example, Bitcoin miners can only mine Bitcoins that belong to the algorithm protocol of this cryptocurrency. If you solve the puzzle first then you have the right to create a new block in that blockchain and get the new coins plus the transaction fees of all transactions that are in such a new block.

A miner keeps track of the entire blockchain.

A miner nowadays has almost no choice but to join a third party, a mining pool, because mining on your own is a losing game. Only if you have very good and expensive equipment and energy is very cheap do you still have any chance of mining as a soloist.

Miners thus ensure that the state of the network is known, so that anyone who has the database can see what wallets the coins are in.

Can you run a node yourself and validate transactions?

Without question, it is possible to run a node for any network. The question, however, is whether it is smart to engage in this.

With Proof of Work, you need very expensive equipment and quite a bit of understanding of hardware and software. Moreover, power costs in the EU have risen to the point where it is not advisable to join a Proof of Work network. The costs are likely to exceed the benefits.

With a Proof of Stake network, you can also run a node yourself. This generally requires very high investments. With established coins, which have a higher value, you already need a large amount of coins as collateral to be allowed to start a node at all. You also need special hardware and software. The hardware is very expensive and the software is difficult to understand for those who have not done university studies in ICT. So it's best to stake through a delegate and still participate in a blockchain, without having to do all that difficult work.

In some networks it may still be possible to participate as a node. As a light node, you can join anyway, but you don't get a reward for that. You can also keep track of the Bitcoin blockchain as a node, without compensation. However, if you want to make money with it, it may be possible to join a blockchain as a master node or super node if the coin is not yet high in CoinGecko's list. Then the collateral won't cost that much. The hardware requirements will still be high and you will have to invest considerable time in your knowledge of the software and other requirements, but at least you will be fully participating. A disadvantage of this setup is that this coin may never get higher and you will keep getting more coins from a network that is not growing or even collapsing. You will then need to research to the chances of success of that project.

The future of nodes

Are nodes here to stay? Will nodes always be needed in blockchains? Most people think so.

Since a blockchain is a distributed database, nodes will be needed for a very long time, perhaps always. After all, the idea behind running a blockchain is to distribute a database through nodes in such a way that it is stored decentrally, so that it is not only always online, but also very safe from attacks on such a network.

A node is the linchpin of a blockchain network. Therefore, it is not likely to disappear, although its name may vary by network or technology.