What Are Blockchain Nodes, How Do They Work, And Why Do They Matter?

If you’ve had an opportunity to deal with cryptocurrencies or blockchain, you might have encountered the term “node.” Nodes exist in almost every decentralized network and play a key role in running it.

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But what are they actually, 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’ll 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’re accessing Facebook’s central server, which contains all data from all users in one place.

Think of it as one giant node. That’s how most centralized organizations work.

However, when using Bitcoin, for example, there are no such centralized servers. The information about every Bitcoin transaction is passed to every device part of the decentralized network.

These devices are nodes. You can think of them as small servers — tens of thousands of them (on big networks, such as Bitcoin).

They all communicate with each other and keep the network alive and running. You can think of them as the infrastructure of blockchain.

How Do Nodes Work?

The primary function of nodes is to store and spread data on the blockchain. Let’s quickly get back to the Bitcoin example.

Once you make a transaction, every node will communicate with all other nodes until all nodes accept and store the transaction information.

Nodes are essential for making a network decentralized and, thus, more secure. Facebook’s server can be considered a single node when you think about it.

Decentralization means democratization, meaning no single entity has the power over all our data.

Who Can Run a Node?

Most decentralized networks are open to everyone, meaning anyone can run a node. All it takes is devoting your device to the network and turning it into a node. To do that, you’ll probably have to download the appropriate software.

Why Do People Decide to Run a Node?

There are several reasons some people decide to run a node on their device, but the most important one is the money. Almost every blockchain network has an incentive program for those who contribute to it.

But money doesn’t always have to be the primary motivation. Some people simply want to contribute to a blockchain by hosting a node while not caring about the money.

Running a node has become sophisticated nowadays, and some projects are working on improving the experience.

One such example is Bware Labs. It’s a company that makes collaboration easy between full node owners and endpoint users (such as developers or even entire organizations). It creates a secure environment for their interaction and facilitates it. 

Are Nodes Miners?

Every miner needs to run a node in 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 in the blockchain.

On the other hand, not all nodes have to be miners, as nodes can still perform their primary function without the feature to insert new blocks.

What Are Validator Nodes?

There are several different consensus mechanisms for blockchains, with Proof-of-Work and Proof-of-Stake being the most important ones.

In Proof-of-Work, miners (also nodes) need to compete to gain the right to validate a new block.

In Proof-of-Stake, there are validator nodes. These are special nodes that have the right to validate new blocks, while other non-validator nodes just store the blockchain on them and help by making the platform decentralized. 

Can You Stake in Nodes?

The science behind nodes has become quite sophisticated. Nowadays, you don’t have to run an actual node to earn rewards. Instead, some projects, such as Wanchain, will let you delegate your funds to a validator node and make a small percentage of what the validator node earns.

This is similar to staking, except you stake your funds in a pool that supports a validator node.

Wanchain is an ambitious project that aims to change the current state of blockchains, which is quite scattered since every blockchain is a world of its own.

The project compares itself to Wide Area Network (WAN) for blockchains. In other words, Wanchain works toward making communication and interoperability possible between many different chains. 

Delegation is different from staking, as the latter refers to staking on the network in a Proof-of-Stake blockchain to secure it and gain the right to host a node and become a validator. 

Final Thoughts

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 on improving the experience of hosting a node and making it more user-friendly.

Because of that, mass adoption of blockchains, along with the concept of nodes, seems like a realistic goal, and we can expect more people to opt to host nodes on their devices in the future.