This article is brought to you by myNode – Article patronage is essential to keep bitcoinnews.com free and support independent writers and creators.
We’ve all heard how Bitcoin mining can generate a passive income. But how about the passive pleasure of running a bitcoin full node?
In this article we share key benefits that bitcoin node operators can enjoy year around with their decentralized home servers. We’ll go through what a bitcoin node is, and what running a full node means.
Setting up a Bitcoin node is very easy. It just requires a normal computer with internet connection with about 1 terabyte of free disk space. You wouldn’t need a very fast internet connection to be able to interact with the Bitcoin network. A normal ADSL connection would suffice.
But a faster internet connection will definitely help with the initial setup of the Bitcoin node, as it will need to download about 500GB of data just once. This data includes a history of the Bitcoin network from the beginning up to now.
What Is A Bitcoin Node?
Bitcoin is a peer-to-peer electronic cash system. Like the internet, a single server doesn’t maintain the entire network. Many nodes across the globe are running the Bitcoin software simultaneously, ensuring its integrity.
A Bitcoin node, is in instance of Bitcoin Core software running on your operating system. It connects you to the Bitcoin peer-to-peer network of nodes.
What are these nodes doing?
The nodes each have a complete record of the Bitcoin blockchain starting back at the genesis block, the first block mined by Satoshi Nakamoto.
Each node stores the entire blockchain if it’s a full node. If they are light nodes (pruned nodes or lightweight nodes) instead of having a complete copy of the blockchain, they only keep the headers of the blocks, and full blocks after a certain height. It’s like having the title of each page of a book, and keeping entire pages after a certain page number.
Additionally, these nodes announce bitcoin transactions initiated by the users of Bitcoin. When a Bitcoin transaction is created, it is broadcasted through the network of nodes. Every node that receives a transaction from its peers, checks it for validity. It includes checking the originating address, the amount and the signature, and ensures that everything is correct.
If any of the stated factors is incorrect, the node rejects and deletes the transaction. But if its correct, it gets added to a temporary memory called the mempool. The receiving node also propagates the transaction through the network by sending it to the nodes it is connected to.
The nodes can also display a transaction history of any given address. These node validate transactions and blocks based on the Bitcoin protocol.
What’s The Difference Between Bitcoin Miners And Bitcoin Nodes?
Those familiar with how Bitcoin and blockchain networks work, are likely familiar with miners. However, nodes and miners are distinct cogs in this elaborate machine. In a very simple way we could summarize:
Wallets: Creating transactions, and managing your bitcoin
Miners: Verifying transactions and adding blocks to the blockchain
Nodes: Validating the blockchain and storing it
Miners use energy from the real world, validate and package transactions into blocks, and add them to the entire blockchain through a process known as ‘proof of work’.
Nodes, on the other hand, don’t need much energy at all. They simply keep a record of the blockchain as it grows. The requirements to run a node are low – No special hardware requirement, no high energy bills, or hot computers making noise all day.
While mining isn’t for everyone, everyone should consider running a Bitcoin node.
Nodes Protect The Bitcoin Network From Disaster
There are two main reasons why anyone should engage in running a Bitcoin node: philosophical and practical. Let us begin by discussing the philosophical reasons. It is essential to realize that the Bitcoin network becomes more robust with more nodes.
Imagine Bitcoin is a network of computers, all communicating with one another. Some computers are creating transactions, some are validating that those transactions are legitimate, and some are storing and recording the entire blockchain ledger as this transpires (the first and last actions are performed by nodes, the second performed by miners).
Now, let us say that you use Bitcoin every day in your home country but don’t have your own node. Also, let us imagine the hypothetical scenario where all Bitcoin nodes and miners of the whole network exist in a city called Pompeii.
One day, a volcano erupts and engulfs Pompeii in ash, and all the nodes and miners go offline. All your Bitcoin has now disappeared because there is no longer a Bitcoin network. However, if you had a single node that recorded the entire blockchain, then even when the volcano erupts, everyone that used Bitcoin would thank you for having a record of all transactions beginning from 2009.
You will be a hero because your record of the blockchain allows everyone to verify their rightful ownership of their Bitcoin. Of course, this is a rather unlikely scenario as Bitcoin nodes are already distributed across the entire planet. Nonetheless, it illustrates how every person who runs a node contributes to the health and safety of the whole network.
Decentralized Networks Need Users To Run Nodes
Perhaps you’ve asked yourself once, who controls the internet? The internet was designed to be ultra robust, or even anti-fragile, meaning it would grow even stronger if attacked.
But today, the internet is not fully decentralized. Countries such as China and North Korea run their own version of the internet using unique infrastructure, root servers and payment providers. The Chinese internet is not the same that Americans access.
Now in the case of Bitcoin, decentralization can be enhanced by running bitcoin nodes. These nodes rely on internet connection to be able to talk to each other. Each node has a vote on protocol updates and in case an update has a negative impact can refuse to update.
Imagine numerous governments would conspire and attempted to outlaw Bitcoin and shut down all nodes in their jurisdictions. It would be crucial to the network’s security to retain a sizable number of nodes outside of such areas in order to preserve the Bitcoin network and continuity of the system.
Another example is a severe bug. A critical mass of nodes would need to keep the network going while the vulnerability was patched if a flaw in the coding brought down a large number of nodes. When the bug is fixed, the afflicted nodes may re-join the network.
Practical Reasons To Run A Node
Beyond the moral and philosophical reasons to run a node, there are also some practical reasons: Running a node means you have more privacy and autonomy in using Bitcoin. A node broadcasts every transaction.
Say you use Bitcoin, but you use a non-custodial wallet service to store and operate your Bitcoin. Even if you hold your private keys, you use another company or service node to broadcast your transactions. This third party knows your IP address and everything about your transaction.
With your node, you can broadcast your transaction to the network, increasing your privacy while sending Bitcoin. This also gives you the capability of querying the blockchain, understanding your transaction’s status, etc. Running a node gives you complete control and autonomy. In the world of Bitcoin, running a node is a means of taking further control over your own life.
Bitcoin is changing the world. It provides freedom, property rights, and autonomy to those who use it. Not only does running a node help keep this network alive, but it also allows any person interested in the benefits of Bitcoin to further enhance their journey towards independence.
Conclusion
It is important to run a Bitcoin node for both philosophical and practical reasons. A Bitcoin node is a decentralized home server that connects to the Bitcoin peer-to-peer network and validates transactions and blocks.
Running a Bitcoin node is relatively easy and can be done with a standard computer and an internet connection. While a faster internet connection can help with the initial setup, it’s not a strict requirement.
A Bitcoin node is an instance of Bitcoin core software running on your computer. It connects you to the Bitcoin network and stores the entire blockchain or a pruned version of it.
Bitcoin miners are different from nodes. They validate and add transactions to the blockchain through a process called “proof of work,” while nodes validate the blockchain and store it. Running a node requires fewer resources and energy compared to mining.
Decentralization is a key principle in Bitcoin’s design. Running nodes contributes to network security, as they have a vote on protocol updates and can help preserve the network in the face of government crackdowns or severe software bugs.
Running a Bitcoin node means you can broadcast your own transactions, enhancing your privacy and control over your Bitcoin usage. It allows you to query the blockchain, understand transaction statuses, and take more control over your financial activities.
In conclusion, running a Bitcoin node offers various benefits, from contributing to the health of the network to gaining more privacy and autonomy in your Bitcoin transactions. It is portrayed as a way to enhance the Bitcoin experience and further one’s journey towards financial independence and autonomy.
