If you have had the chance to deal with cryptocurrencies or blockchain, you may have come across the term “node”. Nodes exist in almost all decentralized networks and play a key role in their operation.
But what are they really and how do they work?
This article will provide a quick overview of nodes to help you understand the blockchain world. Once you know more about nodes, you will have a better understanding of cryptocurrencies, NFTs, and everything else that uses the power of decentralized networks.
What are nodes?
When you access Facebook, you access the central Facebook server, which contains all the data of all users in one place.
Think of it as a giant node. This is how most centralized organizations work.
However, when using Bitcoin, for example, there are no such centralized servers. Information about each Bitcoin transaction is passed to each device that is part of the decentralized network.
These devices are nodes. You can think of them as small servers: tens of thousands of them (on large networks, like Bitcoin).
They all communicate with each other and keep the network alive and running. You can think of them as the infrastructure of the blockchain.
How do the nodes work?
The main function of nodes is to store and disseminate data on the blockchain. Let’s quickly go back to the Bitcoin example.
Once you make a transaction, each node will communicate with all other nodes until all nodes accept and store the transaction information.
Nodes are essential to make a network decentralized and therefore more secure. The Facebook server can be considered a single node when you think about it.
Decentralization means democratization, which means that no single entity has power over all of our data.
Who can run a node?
Most decentralized networks are open to everyone, which means anyone can run a node. All you need is to dedicate your device to the network and make it a node. To do that, you’ll probably need to download the appropriate software.
Why do people decide to run a node?
There are several reasons why some people decide to run a node on their device, but the biggest one is money. Almost all blockchain networks have an incentive program for those who contribute.
But money doesn’t always have to be the main motivation. Some people just want to contribute to a blockchain by hosting a node without worrying about money.
Running a node has become sophisticated nowadays, and some projects are working to improve the experience.
An example of this is Bware Labs. It is a company that facilitates collaboration between full node owners and end users (such as developers or even entire organizations). It creates a safe environment for their interaction and facilitates it.
Are nodes miners?
Each miner needs to run a node on a type of blockchain that requires mining. These have to be full nodes that will also have the right to validate new blocks and store them on the blockchain.
On the other hand, not all nodes have to be miners, since nodes can still perform their main function without the function of inserting new blocks.
What are validation nodes?
There are several different consensus mechanisms for blockchains, with Proof-of-Work and Proof-of-Stake being the most important.
In Proof of Work, miners (also nodes) must compete for the right to validate a new block.
In Proof of Stake, there are validation nodes. These are special nodes that have the right to validate new blocks, while other nodes that are not validators simply store the blockchain on them and help decentralize the platform.
Can you bet on nodes?
The science behind nodes has become quite sophisticated. Nowadays, you don’t need to run a real node to get rewards. Instead, some projects, like Wanchain, will allow you to delegate your funds to a validator node and get a small percentage of what the validator earns.
This is similar to staking, except that you stake your funds on a pool that supports a validation node.
Wanchain is an ambitious project that aims to change the current state of blockchains, which is quite scattered as each blockchain is a world unto itself.
The project is compared to the wide area network (WAN) for blockchains. In other words, Wanchain works to make communication and interoperability possible between many different chains.
Delegation is different from staking, as the latter refers to staking the network on a proof-of-stake blockchain to secure it and gain the right to host a node and become a validator.
Nodes are the engine behind every blockchain. Making a node is easy, as everyone can do it by installing the necessary software and downloading the required information (usually the history of the blockchain network).
Many projects, such as BWare Labs, work to improve the experience of hosting a node and make it easier to use.
Therefore, the mass adoption of blockchains, along with the concept of nodes, seems like a realistic goal, and we can expect more people to choose to host nodes on their devices in the future.
This post What are blockchain nodes, how do they work, and why are they important?
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