What are Nodes? Everything you need to know about the crypto term

There are multiple types of nodes, with each playing different roles within a particular network.

Anyone who has even remotely dabbled in the world of cryptocurrencies would have come across the term ‘node’ at one point or the other. The term has varied definitions as per its context but when it comes to blockchains, it essentially refers to a “point in a network” via which messages/transactions can be initiated, received or transmitted. 

Also, since blockchains are designed as distributed systems – i.e. they consist of a number of computers (nodes) – they can be used to facilitate peer-to-peer transactions in a highly transparent, seamless fashion. Additionally, such a framework by its very nature is ‘censorship-resistant’ as well as eliminates the need for any intermediaries for facilitating transactions between individuals. 

Thus in essence, a node acts as a communication point capable of performing a wide variety of functions. As an example, one can see that any computer or digital interface medium that connects to, lets say, the Bitcoin ecosystem can potentially be considered as a node, which is to say that it can be used to relay information with another device present within the network. That being said, there are a variety of nodes, depending on their particular function as well as operational utility.

Types of Nodes

Full nodes

As the name seems to imply, full nodes are responsible for the governance of a particular blockchain network. They are also sometimes referred to as ‘validator nodes’ since they play a crucial role in the verification of transactions, as well as in the mining of blocks, in line with a platform’s native consensus rules. 

Another core facet of a full node is that it usually contains a full list of every transaction associated with its particular blockchain network. As a result, even if one node fails, a copy of the entire ledger can be easily obtained through another full node.

Miner Nodes

To mine most cryptocurrencies — like Bitcoin, Ethereum, Litecoin, Monero — a lot of high end hardware and software is required. Not only that, as per recent reports, the total amount of electricity needed to power Bitcoin’s global mining operations — estimated to be a whopping 11.46 GW —  is equal to that of seven nuclear power plants or 21.8 million photovoltaic (PV) solar panels.  

In this regard, a mining node  sacrifices computing power in order to tackle highly complex digital equations, which when solved result in the creation of new cryptocurrencies such as BTC, ETH, etc. It bears mentioning that every node in a blockchain network has the option of becoming a mining node. 

Light Nodes

Also referred to as Simplified Payment Verification (SPV) clients, light nodes do not contribute to a network’s security since they are not required to maintain a copy of their associated blockchain’s complete data. Not only that, they don’t play any role in the verification/validation of transactions, however, they do provide users with a means of checking whether or not certain transactions have been included in a block.

SPV clients are highly dependent on the information provided to them by full nodes and basically serve as communication endpoints within a system. This is also one of the reasons why many crypto wallet providers make use of them for facilitating their monetary transactions.

Key Takeaways

  • Nodes ensure the integrity of a blockchain: As highlighted earlier, in the context of a blockchain system, nodes interact with one another via the use of a P2P network protocol, and by doing so, guarantee the integrity of the system. For example, if one or more nodes go rogue – compromising the overall security of the ecosystem – honest node operators can swoop in and disconnect them from the network.
  • There are many different types of nodes: Nodes are not just of one kind, in fact there are multiple types  — such as mining/full/light nodes — with each of them playing different roles within a particular network
  • Mining nodes offer lucrative incentives: Individuals who take up the role of miners can potentially earn rewards in the form of various cryptocurrencies like Bitcoin, Ethereum, etc.
  • Full nodes act as enforcers: Full nodes provide trust, security, and privacy to the users of a particular network by protecting them against third party attacks (51% hacks), frauds (double-spending), etc.

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