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If you are new to Bitcoin and the notion of cryptocurrency and blockchain, you might wonder what is a Bitcoin node, and what it’s used for. This article will explain to you the essentials of bitcoin node, and answer your questions concerning the technology.
So, what is a Bitcoin node?
The Bitcoin network is a set of computers around the world that use the Bitcoin Core software, and it checks transactions and blocks. The distribution of these “nodes” (a term for a computer connected to the network), and the fact that anyone can raise one of them, making Bitcoin “decentralized”. This means that any user can configure the site if he has access to a PC having the necessary power and connection to the Net. And even if one node is up and running, the Bitcoin network lives on.
Node (from Latin ‘Nodus’) is any computer connected to the blockchain network. The nodes of the decentralized network are contacted via P2P protocols for exchanging information about blocks and transactions. The node, depending on its type, stores only part or all of the blockchain data.
Here’s the Bitcoin node map that shows the number of nodes currently connected to the Bitcoin network:
Most full Bitcoin nodes also act as a client, which allows you to send transactions to the network. This means that the node acts as your personal interface for communication with the Bitcoin network. Running a node ensures that your transactions are verified and sent to the person you are conducting the transaction with. This makes it possible to send money around the world without censorship (personal gain) and contributes to the security and strength of the network itself (public gain).
Running a full node is different from mining bitcoin, which includes launching special software and requires a lot of resources. And while most of the mining is carried out by large companies with data centers and global farms, the launch of full nodes is available to everyone.
Why run a full node?
There are various reasons and benefits of running a Bitcoin node in its full version:
- Do you believe in Bitcoin and cryptocurrencies in general and want the network to evolve? Each new node that joins the network brings closer to the future, where everyone interacts in the crypto network and no governments can introduce censorship.
- You intend to use Bitcoin to conduct transactions and want your transactions to be quickly verified. The idea of BTC is to move away from the traditional monetary system: you do not need to trust the bank to store or transfer money. But until you use your own host, you still have to trust someone.
- Once the full node is set, you do not just buy Bitcoin, you become a part of the network.
This video explains why running a full node is a good idea:
How to install Bitcoin full node?
There are 3 ways to configure your own complete Bitcoin node: from quite difficult and time-consuming to very simple, but a little more expensive.
- Setting up the node on your own computer or any machine with the necessary equipment,
- Running nodes in the cloud.
- Buying a standalone boxed solution that automatically configures the site.
The first two methods are very similar, with small specifications. As technology develops, this process will only simplify and become cheaper.
A full node on the Bitcoin network can be run locally on a physical computer or on a virtual server. To start, you need to download the Bitcoin Core client on bitcoin.org and download the entire blockchain. For a full node to work, an open TCP port 8333 is required. When using a software firewall, you must provide access to avoid blocking the port. If you decide to configure the node manually, here is the official instruction.
Node-in-a-box is the easiest way to set up a complete Bitcoin node. The device connects to the Internet router, like a cable box. This allows you to run a node without installing anything on a computer or other device. But solutions are quite expensive (the option from Bitseed starts from $360).
You need to install the node on the computer with the following minimum requirements:
- The latest version of the MacOS, Linux or Windows operating system
- 150+ GB of free disk space,
- 2 GB RAM
- High-speed Internet connection (at least 50 Kb / s),
- Unlimited or very high download limit (a node can upload about 200 GB and download about 20 GB per month).
If you decide to use the cloud and configure the node on a virtual server, make sure that the machine you are renting has the same specifications! Pay attention to the bandwidth limit in any cloud solution.
If you plan to locally run the full Bitcoin node on the computer, you can choose to run the Bitcoin Core software or work through the command line. If you work in the cloud, most likely you will use the command-line method.
How does the number of full nodes affect the functioning of the network?
Those who run the full notes contribute to the introduction of improvements in the Bitcoin network. An increase in the number of such nodes favors decentralization and complicates the process of adopting protocols only in the interests of certain groups of players.
What is a Bitcoin light node?
A lightweight node is any computer with special software that is connected to the blockchain network. Lightweight nodes do not store all blockchain data, but only block headers to confirm the authenticity of the transactions they contain. Lightweight nodes depend on full nodes and can be misleading by confirming transactions that contradict the consensus algorithm.
What is a masternode?
A masternode is a specially configured full node that shares a reward for network maintenance with miners. Masternodes provide increased anonymity, since transaction information is not publicly available on the blockchain, but is recorded only on masternodes. To start a masternode, you need to make a fixed deposit with network coins.
What is a supernode?
A supernode is a masternode on the NEM network. In other words, a supernode is a cryptocurrency API endpoint operating without a wallet, public block browsers (according to Ambisafe’s classification).
Can I get income from owning a masternode?
Yes, the content of the masternode can be regarded as passive mining, since their owners share the profit from the generation and validation of blocks with miners. Typically, the masternode’s profitability is inversely proportional to the liquidity of the coin – thus, high capitalization and user activity indicators result in a decrease in the masternode’s yield in such a network.