August 18, 2022

What are Blockchain Nodes? A Complete Guide

Blockchain node is a device on a blockchain network that stores a copy of the entire blockchain and participates in validating transactions. Read more to discover the various types of blockchain...

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Shardeum Content Team

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What are Blockchain Nodes?

Blockchain nodes are essential components of a blockchain network. They are computer devices or servers connected to the network while participating in the ordering, verification and validation of transactions. Essentially, nodes help to ensure that the blockchain is a secure and reliable record of all transactions that have taken place on the network.

There are several types of blockchain nodes that can exist on a blockchain network, each with its own specific roles and responsibilities. Some nodes are responsible for storing a copy of the entire blockchain and validating transactions using the consensus rules of the blockchain. Others are responsible for verifying and adding new transactions to the blockchain. Still others are specialized nodes that are configured to handle more complex tasks on the blockchain, such as running smart contracts or serving as trusted intermediaries for certain transactions.

Regardless of their specific role, all blockchain nodes work together to ensure the integrity and security of the blockchain. They communicate with each other, exchange information about new transactions and blocks, and use the consensus rules of the blockchain to validate these transactions and add them to the blockchain.

This article answers a very important question: what is a blockchain node, and what are its functions? Let’s discuss.

What is the Importance of Blockchain Nodes?

The rising popularity of blockchain technology over the last few years and its widespread adoption in a variety of industries such as supply chain, healthcare, energy, etc. is only going to continue with the advancement in technology. Therefore, it is important to understand the core infrastructure and architecture behind blockchain technology to understand the dynamics and utilities that make it superior to its traditional counterparts.

Nodes are the backbone of a blockchain’s infrastructure. Their main purpose is to enhance the security of the data on the blockchain and prove credibility to the network. There can be thousands of nodes in a blockchain network that ensure its decentralization, immutability, and traceability. Nodes help provide reliability by storing all blockchain transactional records. Moreover, nodes can also protect the blockchain from centralized attacks as there is no single point of failure on a blockchain network. Each node has a copy of the blockchain database and uses it to verify transactions and add them to the blockchain as blocks. Thus, the wider the node network is, the more trustworthy a blockchain is.

Nodes have a variety of uses on the blockchain, ranging from ordering, managing and recording blockchain transactions to rejecting and storing data as well as maintaining the consensus algorithm. Moreover, nodes are also responsible for determining whether a block of transactions or signatures is legitimate or not and subsequently accept or reject it to keep the network running smoothly.

How do Blockchain Nodes Work?

Now that we have discussed what is a blockchain node, it is also essential to understand how nodes work. To do that, it is first necessary to go back to blockchains and understand their functioning. Blockchains are a shared, immutable ledger where each block is cryptographically linked to the next, wherein, a change in one part of the blockchain would cause all the subsequent blocks to undergo changes. However, they exist on a distributed network and have multiple copies, meaning they are not subject to change.

Nodes are unique in the sense that each one can be distinguished from the other by a certain characteristic or feature. They can have different functions depending on what the application is. Usually, a node is said to maintain blockchain transaction records, as discussed above, but this is not the function for all the nodes. What the node does depends on the overarching requirements of the blockchain. Each node plays a different role in the blockchain ecosystem, along with the standard duties of managing transactions, sharing the data with other nodes to grow the network, and implementing an algorithm to keep the entire network updated and functioning.

There are also specialized types of blockchain nodes known as RPC nodes that are configured to handle more complex tasks on the blockchain, such as fetching smart contract transactions or serving as trusted intermediaries for certain transactions. These nodes generally have significant computing power and resources and are often operated by large organizations.

Different Types of Blockchain Nodes

The different types of blockchain nodes and their functions for varied blockchain layers are a pivotal part of understanding what is a blockchain node.

1. Full Nodes

A full node stores the entire blockchain, enabling them to fully validate transactions and blocks against the network’s consensus rules. Beyond that, full nodes play a key role in propagating this data throughout the network, ensuring timely and efficient distribution of new transactions and blocks. Full nodes though, usually abstain from suggesting new blocks for inclusion in the blockchain. By running 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 decentralized 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, further, play a significant role in the governance of blockchain networks. When protocol changes or updates are proposed, the choice 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 specialized 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 scrutinize any moment of interest.

For projects that require a deep dive into historical data, or for 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 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 are based on the assumption that validators act honestly. Should 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 decentralization.

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 that is chosen by the organization or community in charge of a blockchain. They are used to authorize 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 decentralized, 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 in order to operate on the blockchain. Authority nodes add a level of centralization to the network in order to increase speed, but they also introduce the possibility of centralized 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 includes 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 of a mining pool.

Miners are one of the different types of nodes in blockchain (either full or lightweight) that attempt to prove that they have completed the necessary 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 can not add new blocks to the blockchain. In general, masternodes are more powerful than regular nodes. Depending on the nature of the event, masternodes may also assist 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 specialized 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 specialized 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 are 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 in order for you to develop a better understanding of the decentralized world and how it is convened over a network of computers.

Frequently Asked Questions (FAQs)

What is a node in blockchain, in the context of Bitcoin

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 requires 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 protocols, 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 on 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 completely 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.