Most people have heard of blockchain, but don’t really know what it is. Blockchain is a distributed database that allows for secure, transparent and tamper-proof transactions. It was first developed as the backbone technology behind Bitcoin, but has since been adopted by many other industries. 

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One of the key features of blockchain is its decentralisation. This means that no central authority or middleman is needed to facilitate transactions. Instead, blockchain relies on a network of nodes. 

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So, what exactly is a blockchain node? In short, a node is a computer that contains a copy of the blockchain and helps to keep the network running. Nodes play an important role in verifying and validating transactions, as well as maintaining the security of the network. 

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In this article we will explore the ins and outs of a blockchain node, including the different types of nodes and benefits of running one yourself.

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What are Blockchain Nodes and What are Their Main Functions?

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Blockchain nodes are an important part of every blockchain network. They are used to store and manage the blockchain data. Cryptically certain nodes also verify and validate transactions, which is why it's important for there to be as many nodes as possible in order to keep the network running smoothly. Nodes are what allow for the trustless consensus mechanism and decentralisation.

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Nodes become even more important when it comes to Smart Contract Ecosystems like Ethereum as they are the gateway to the blockchain. As Blockchain developers build decentralised applications (dApps), nodes are required for those applications to interact with the app's smart contract. 

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Technically, a node can be run by anyone on the blockchain. For example, a node might be run by a cryptocurrency exchange, or by an individual investor. By running a node, you can help to support the network and also earn rewards. The more nodes there are in the network, the more secure it is. This is because of the difficulty a hacker would face to take control of the network if there are thousands of nodes spread out all over the world. In addition, if there is ever an issue with one node, the others can pick up the slack and keep the network going. 

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10 Different Types of Blockchain Nodes

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There are lots different types of nodes, each with their own specific function. Here are our top 10 different nodes:

1. Full Node 

A full node stores the entire blockchain history on their computer. This history includes every transaction that has ever taken place on the network, all the way back to the very first block. In order to do this, full nodes need to have a lot of storage space. For Bitcoin, this is currently around 200GB and growing. 

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2. Archival Node 

An archival node is similar to a full node, in that it also stores the entire blockchain history. However, archival nodes go one step further by also storing all the data associated with each transaction. This data includes things like the sender, receiver and amount. 

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3. Pruned Node 

A pruned node is a full node that doesn’t store the entire blockchain history. Instead, it only stores the most recent blocks. This frees up a lot of storage space, but it does mean that the node can’t verify transactions that took place in the past. 

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4. Light Node 

A light node is similar to a pruned node, in that it doesn’t store the entire blockchain history. However, light nodes don’t store any data about the transactions themselves. Instead, they rely on full nodes to provide this information.  

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5. Mining Node 

A mining node is a full node that also participates in the mining process. In order to do this, they need to have a copy of the entire blockchain as well as the correct software. Mining nodes are what create new blocks and add them to the blockchain., essentially approving transactions. This is only relevant for chains that use proof of work as the consensus mechanism (eg Bitcoin).

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6. Validator Node 

A validator node is much like a Mining Node but for chains that use the proof of stake consensus mechanism (e.g. Avalanche). These nodes are used to approve a transaction that has been submitted by a user or blockchain client. Typically you must have a specific amount of the native token staked to run a validator node (this number varies between PoS blockchains) and in return you will get rewarded in that currency.

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7. RPC Nodes  

RPC nodes are used to interact with the blockchain without having to download the entire blockchain history. RPC stands for remote procedure call and these nodes provide an API that allows developers to build applications that interact with the blockchain. 

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8. Master Node  

A master node is a node that stores a copy of the blockchain and processes transactions. In addition to this, master nodes also provide other services to the network, such as instant transactions and private transactions. 

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9. Authority Node  

An authority node is a node that is chosen by the developers of a blockchain to be a reliable source of information. Authority nodes are usually run by the team behind the blockchain and are used to help new nodes sync with the network. 

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10. Lightning Node 

A lightning node is a node that is used to process lightning payments. Lightning payments are instant transactions that are sent through the lightning network. In order to do this, lightning nodes need to be connected to a full node. 

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The Benefits of Running a Node 

As mentioned previously, running a node helps to keep the network secure and decentralised. This is because the more nodes, each with their own copy of the blockchain, the harder it is for a hacker to penetrate the network. 

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However, from an individual's point of view, the most enticing reason is that it can be quite profitable. This is because you earn rewards for processing transactions and adding blocks to the blockchain. The amount of reward you earn depends on the blockchain you are using. This is essentially the basis behind Bitcoin Mining where individuals are rewarded with Bitcoin for processing transactions and adding blocks to the blockchain.  

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However, it should be noted that as the Bitcoin network has grown, it has become increasingly more difficult to profit from mining. This is because the rewards are halved every 4 years and there is a limited supply of Bitcoin that can be mined (21 million). 

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Other blockchains, such as Ethereum, now offer much higher rewards for processing transactions and adding blocks to the blockchain.

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The Risks of Running a Node  

Running a node does have risks associated, especially if you are running a full node. This is because full nodes need to have a complete copy of the blockchain, which can be quite large. This means that if your computer crashes or you lose your data, you will need to start from scratch and download the entire blockchain again. 

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Plus in some cases, if you don't retain a certain amount of uptime, you can actually lose a portion of the tokens staked. That means you have to have a setup that will be able to handle being permanently online and have procedures in place to check your node's uptime.

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Another risk is that if you are not careful, it is possible to get hacked. This is because your node will be constantly connected to the internet and will be storing sensitive information. Therefore, it is important to take precautions such as using a secure VPN and keeping your computer and software up to date with the latest security patches. 

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How to Run a Node  

The process of running a node will vary depending on the blockchain you want to run a node for. However, in most cases, it is fairly straightforward and can be done by anyone with a computer and an internet connection. 

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To run a node for Bitcoin, you first need to download the Bitcoin Core software. This can be done from the Bitcoin website. Once you have installed the software, you will need to set up a node by syncing it with the blockchain. This can be done by connecting to another node or by downloading the entire blockchain. 

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Ethereum nodes can be set up in a similar way. First, you need to download the Ethereum software, which is called Geth. Once you have installed Geth, you will need to sync it with the blockchain. This can be done by connecting to another node or by downloading the entire blockchain. 

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Once your node is up and running, you will need to keep it online and connected to the network. You will also need to have a certain amount of Ether staked in order to be eligible for rewards. 

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Nodes for Development

As well as being used to keep the network secure and decentralised, nodes can also be used for development purposes. All dApps (decentralised applications) require a mechanism for interacting with blockchains. dApps will not be able to access information or conduct transactions on the blockchain on which they run if they don't have a method of communication. As such, RPC nodes are responsible for linking the blockchain and the dApps.

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Many dApp developers start with RPC nodes as their foundation. This works but to construct a full operational dApp, often developers must also build a complete infrastructure around the nodes.

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That's why there are certain services designed to streamline this process, providing fast nodes and the associated infrastructure so blockchain devs can concentrate on the dApp. Here are a few examples:

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• Alchemy
• AWS Managed Blockchain
• Moralis

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Final Thoughts

Blockchain nodes are critically important to the running of any blockchain network. They are used to store and manage the blockchain data as well as verify and validate transactions. Plus the more nodes the more secure that blockchain is.

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You may want to run your own node and reap the rewards. This is a fantastic way to add value to the blockchain community.

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