The word “node” is full of meanings and connotations depending on the branch in which it is used. In the case of cryptocurrencies, especially Bitcoin, it has a very important meaning for the community.
In this article we will look at what nodes are (in the context of cryptocurrencies) and why they are so important.
A node in the context of blockchains is a computer that is part of the P2P (peer-to-peer) network. In general when we talk about a node we refer to a complete node, although, as we will see later, there are other types of nodes.
The function of the full nodes is to store the information of the blockchain (all transactions since its inception) in order to verify all the information. By having the entire transaction log we can determine if a transaction to us has happened (if it has been included in the blockchain) or not.
A key point, which is perhaps not so well known, is that without nodes there is no blockchain, they are absolutely essential. You cannot use, for example, Bitcoin, without using a node. And when a user uses it, either making or receiving transactions, without running his own node, what he is doing is using the node of a third party and trusting it.
This third party will point us to information (such as a company behind a wallet or a block explorer).
In addition, nodes are used to transmit and retransmit transactions over the network (so that they reach the miners and are included in the blockchain). And the same happens with the blocks. When a miner finds a correct block, he transmits it over the network and it quickly reaches all the nodes in the world, which add it to their blockchain.
In blockchains like Ethereum, a distinction is made between “archival nodes” and “non-archival nodes”. An archival node holds much more information that is not generally needed.
Also in Bitcoin we have variations of nodes. There are “pruned” nodes where, after verifying the entire blockchain, unnecessary information is removed for practical purposes. Another type are the SPV or “lightweight” nodes, which do not verify all the information and therefore require more trust. The latter have less hardware requirements (they can be used in smartphones) although they are susceptible to different attacks.
The area of nodes is under constant research and solutions are being sought to reduce hardware requirements and allow a high level of “no trust”, security and privacy. For this we also find solutions such as neutrino and UTreeXO.
There is a misconception that the reason for running nodes is to benefit the network of the respective currency. While it is true that, in general, the more nodes the more decentralized the network, this effect is not significant. Rather than to improve the decentralization of the network, the motive for running a node should be for its own sake.
Running a node allows you not to rely on third parties to verify the amount of coins you have, your incoming transactions and gain privacy. No one will be able to link your IP address with your coins, nor will they know that they belong to a specific person. Nor will anyone be able to deny you a transaction, since you will have total control.
The cryptocurrency and community that gives more relevance to nodes is precisely Bitcoin. Its blockchain optimizes decentralization and the community defends it to the death. In fact, there is a cult of running Bitcoin nodes and showing them on social networks. Nodes are considered a symbol of individual sovereignty.
As the mythical Bitcoin slogan goes:“Don’t trust, verify!”.