What Are Blockchain Nodes, How They Work, And How To Set Up?

Blockchain technology is a decentralised system and this is what makes the Blockchain a unique technology. Being a decentralised system means that the data is not stored in some selected servers, rather a blockchain network consists of numerous computers, named blockchain nodes which are spread across the globe. These computers, or nodes as they are called, are what a blockchain network functions on. In this blog post, we’ll dive deeper into the blockchain node definition and understand how blockchain nodes work.

What is a Blockchain node:

A blockchain node is a device, in most cases a computer, that is connected to a blockchain network and performs specialised operations on the blockchain servers to help maintain the integrity of a blockchain network, verify transactions, etc.

On every node of a blockchain system, an individual copy of the blockchain gets stored which helps to keep the ledger secure and prevents any misoperations on the blockchain ledger.

How blockchain nodes work

Every day an enormous number of transactions take place on a blockchain network. And, the underlying technology of a blockchain network is built in a way that it successfully completes the transaction. Below, we’ll discuss how a blockchain node functions and helps to process a transaction.

As a user on the blockchain tries to make a transaction using the blockchain, all the nodes on the blockchain network get informed about the details of the transaction.

The details that are sent over to each node include details about the data to be transferred, and the address of the sender as well as the receiver. Most importantly, the nodes also verify the sender using a digital signature.

After this, the blockchain nodes verify the transaction. Once the verification is successful, the nodes make a group of transactions, which are known as Blocks.

Now comes the mining block, a relatively powerful computer with specialized hardwares that solves mathematical problems related to cryptography and once successful, it adds the new block to the blockchain.

After a block is added to the blockchain network, the update is broadcasted to all nodes and every node adds the details about the net block in its memory.

Blockchain node types

Not every node on a blockchain network performs the same operations. There are different sorts of devices on the blockchain network for different blockchain operations.

Full blockchain nodes:

Every blockchain network has a number of full nodes that take the principal role to run a blockchain. A copy of the entire historical transaction ledger is stored in every ‘full node’. One single full node can run verifications of blocks independently. In every blockchain network, the ‘full nodes’ are considered to be the safest nodes.

But one problem with ‘full nodes’ is that they require top-performing hardware, for example: as they store an entire copy of transactions, they need to have terabytes of storage, similarly they also need superb processing speed and bandwidth.

Mining blockchain nodes:

After a group of transactions are created, a special type of node, containing specialized hardware, performs complex mathematical calculations to add a block to the blockchain network - these nodes are called mining nodes.

As they need to solve very complex mathematical problems, the mining nodes consume a lot of power and also require specialized hardwares.

Light blockchain nodes:

Unlike full nodes, the light nodes don't store complete data of a blockchain. They act more like a support to the ‘full nodes’ and one of the jobs that light nodes perform is that they keep a queue of transactions.

DApp blockchain node:

DApp blockchain nodes as a part of the blockchain network supports decentralized apps. The best use cases include running digital currency apps and running IoT devices.

Benefits of Running a Blockchain Node

Running a blockchain node offers exclusive benefits over using a system from a centralized authority.

Offers direct access:

Running your own blockchain node provides the owner with direct access to the blockchain. The node owner doesn’t need to rely on any third party for accessing the contents of the blockchain, for example, if the node is a ‘full node’, the node owner gets a complete copy of the transactions ever made using the network.

Reduces latency and downtime:

Using your own machine to run a blockchain node reduces the latency caused while connecting to another blockchain. Also, if the 3rd party gets disconnected from the blockchain network, it doesn’t affect the functionally as you, yourself are running a node.

PoW & PoS:

If you set up a node, you can earn rewards in the form of Proof of Work or Proof of Work (especially for mining nodes) for you leveraging your own machine and electricity as a node.

Blockchain node requirements:

Apart from software, a blockchain node requires special equipment and services including some specialized hardware.

Processing power:

Running a powerful node requires the owner to have a strong processing device using which the blockchain operations take place.

For running a mining node, you’ll need specialized hardware that are efficient to solve complex cryptographical problems; ASIC miners and powerful GPUs are examples of hardwares used for mining.

Bandwidth:

A blockchain needs a fast and reliable internet connection with high bandwidth because a disruption in the internet can lead the node to go offline.

Energy:

Last but not the least, a node needs to be running all day long; that’s why it is necessary to have a reliable energy source, especially to minimize downtime.

How to host a blockchain node

If a person or an organization wants to be a contributor to the peer-to-peer blockchain network, they can set up a blockchain node of their own by using proper hardware. Here’s a Blockchain node setup guide to easily set up a blockchain node on your own:

First, you’ll need to make sure you have the appropriate hardware depending on the type of node you want to run.
In the next step, select the blockchain network you would love to be a part of; download the required software for that blockchain and set up them.
Upon running the software for the first time, the software might run some checks or download data. If you’re trying to set up a full node, it’ll likely download a huge amount of data which can take hours.
Once everything is finished, you’ll be a part of the blockchain network as a node.

Blockchain node architecture:

A blockchain is a peer-to-peer network which means each node on the network can directly connect with other nodes on the same network.
A full node or the master node of a blockchain network holds a full copy of the entire transaction of the blockchain network.
Nodes on the blockchain network earn rewards for the computation power and energy used to run the node.
Each blockchain node is connected to the internet; whenever a block is added to the blockchain network, every applicable node on the network receives the information and updates its data.
All credit of blockchain security goes to the cryptography mechanism used in blockchain networks.

Blockchain Node Software

Each blockchain has different software that needs to be installed to set up a node. In this post on blockchain node tutorial, we’ll be providing a list of the most popular blockchain node software:

For Bitcoin: Bitcoin Core (the most popular one and provides the user with complete control and functionality)
For Ethereum: Geth (the official Ethereum blockchain node software, it also provides full control)
For devs: EOSIO (Built for dApps; works on proof-of-state basis)

Conclusion:

In the current Web3 technology, everything is becoming decentralised, and blockchain technology is leading the decentralised network. We hope that this article has made you aware of the importance of blockchain nodes As well as the working principle of blockchain nodes. By implementing the guide for setting up a blockchain node, you can also be a part of a popular blockchain node spread all across the world.

Preguntas frecuentes

How to select the best blockchain node provider?

In order to select the best blockchain node provider, you have to keep several facts in mind. First, you would need a clear idea of your requirements. Take a look at the websites of popular blockchain note providers (for example: Alchemy, Bitcoin, QuickNode, Infura Inc, Ankr, etc) and the services they offer. Also, take a look at the pricing of each blockchain note provider and select the one that suits you.

What happens when one blockchain node goes offline?

If any blockchain node goes offline it typically doesn't have much impact on the functionality of the overall blockchain network, because a blockchain network is a decentralized network. However, if a master node goes offline it can cause several issues like delayed transaction time, increased latency, and in some cases, can also affect the integrity of data.

What is proof-of-work?

Proof of work is a type of reward that all mining blockchain nodes receive after a computer on the blockchain node solves the cryptography problem. This acts as compensation for the work done by all the nodes.