Node (Node) in the blockchain system: From theory to practice

When it comes to Cryptocurrency and blockchain, the term “Node” often appears frequently. However, many investors still do not understand its true role within the network. This article will explain in detail what a node is, its functions, and how important it is to the blockchain system.

What is a Node? Meaning and Role

A (Node) is actually a computer or server connected to the blockchain network. Its responsibility is to maintain the network’s normal operation through verifying and relaying transactions.

The main function of a node is to confirm the validity of transactions according to the network’s rules in each block. Each node is assigned a unique identifier within the network, which helps in easy differentiation.

In blockchains that use Proof-of-Work (PoW), such as Bitcoin (BTC), nodes are considered an integral part of the digital revolution. Since the inception of blockchain technology, nodes have served as the backbone of this system.

How Do Nodes Work in the Blockchain Network?

The operation of nodes in a blockchain network can take various forms. Although there may be differences across systems, the fundamental principles are equally important.

Step 1: Distribution of Signed Transactions

When a user signs a transaction, the details are sent to the first set of nodes. These nodes are responsible for forwarding the information to other nodes layer by layer until the transaction is included in a block or canceled.

Step 2: Verification of Transactions in the Pool

Once the transaction is distributed, it enters the Mempool in each node. Initially, the transaction is in a queue state. Nodes must verify the correctness of each transaction.

When the majority of nodes confirm the transaction is valid, it moves to the “Pending” state, meaning it is ready to be included in the blockchain. Conversely, if most nodes find the transaction invalid, it will be rejected and deleted.

Step 3: Inclusion in Block and Broadcasting

Once the transaction passes verification, the (Miner) or (Validator) will add a new block to the network. This process is designed to maximize security.

When a block is added to the chain, the transactions become immutable and cannot be altered. Any changes require approval from the majority of nodes, which can number in the thousands. This check-and-balance system enhances network security.

Step 4: Incentive and Penalty System

Besides verifying transactions, nodes also create incentives to ensure operators work fairly.

In PoW blockchains like Bitcoin, nodes that mine blocks receive rewards in digital currency. Miners must use enormous computational power to solve complex problems, which motivates them to add valid blocks. However, this high energy cost makes cheating unprofitable.

For Proof-of-Stake (PoS) blockchains, the system differs. Validator nodes must lock a large amount of capital as collateral. If they act according to the rules, they earn additional rewards. If they behave maliciously, their stake (Stake) will be reduced. This mechanism maintains network integrity without requiring significant energy expenditure.

The Importance of Nodes to Blockchain

Nodes are considered the heart of the blockchain system for several reasons.

First, to decentralize the network, the only way is through a Peer-to-Peer system, and the most effective management method is via blockchain. Nodes enable the blockchain to verify transactions fairly without any central authority interference.

Second, the more participants operating nodes, the harder it is for malicious actors to control or attack the network. Nodes ensure that users and miners adhere to the rules.

These two features make the network more decentralized and secure. As a result, we often see various types of nodes in blockchain applications.

Sometimes, users may want to set up their own crypto nodes, whether full nodes, mining nodes, or validator nodes. These options are available for general users. Additionally, users can directly support validator nodes through various platforms.

Without nodes, there would be no place to store blockchain data, which is why nodes are highly significant to blockchain.

How Many Types of Nodes Are There?

Nodes can be classified into several types, each with specific roles within the blockchain infrastructure.

Full Node (Full Node)

A Full Node stores a complete copy of the digital ledger of the network. It is a fundamental backbone of most blockchain systems.

This type of node maintains the entire history of the chain and communicates with other Full Nodes. It also prepares copies of the chain for new nodes joining the network, making it the true backbone. For this reason, most blockchains require Full Nodes.

Miner Nodes (Mining Nodes)

These nodes consist of participants responsible for verifying transactions and adding blocks to the chain.

In PoW blockchains, mining requires high computational power to solve complex mathematical problems. Miners are rewarded with cryptocurrency as specified by the protocol for their work.

Validator Nodes (Validator Nodes)

Validator nodes operate similarly to Miner Nodes but within a Proof-of-Stake network. They verify transactions and create new blocks.

They do not need to solve difficult calculations but are selected based on the amount of capital they lock in the system. Like miners, validators are rewarded for creating blocks.

Light Nodes (Light Nodes)

Light Nodes are crucial for blockchain operation because they do not store the entire chain but only download the “block headers.”

This method requires less technical resources, meaning less storage capacity. Their sole function is to verify transactions using simplified payment verification (SPV).

Not all blockchains use this type of node. Light Nodes are especially popular in blockchains with storage limitations per block, such as Bitcoin.

Relationship Between Node, Blockchain, and Miner

The fundamental system of all cryptocurrencies and blockchain platforms relies on a “Blockchain” network.

Within the blockchain network, a key powerful system is the “Smart Contract.” These contracts operate automatically and can execute themselves without intermediaries or other entities. Smart contracts consist of computer code and data.

In the world of cryptocurrency, data is not stored on a single node but across all nodes in the network. This approach helps prevent data attacks.

Miners are groups responsible for verifying transactions and solving mathematical equations. Once verification is complete, the block joins the blockchain, and these groups are rewarded with digital currency according to the platform’s conditions.

How to Create a Blockchain Node

The process of creating a blockchain node can be accomplished by following three main steps.

The first step is to prepare suitable hardware for the node. Users can set up a node on their own computer to achieve optimal performance.

The second step is to download the blockchain node software and install it on their device properly.

The third step is to run the software regularly after installation to keep the node operational continuously.

Key Factors: The main considerations for setting up a blockchain node are hardware and internet connection. Users need sufficient memory, especially when running a Full Node that stores the entire chain.

Blockchain nodes upload large amounts of data, so you should check your internet plan’s upload limits to avoid issues later.

Risks of Operating a Node

As the popularity of nodes continues to grow, it is essential to understand the security and privacy risks involved.

Malware Attacks (Malware)

Nodes that are not properly secured may be vulnerable to malware attacks. Malware can be used to steal sensitive information, such as private keys, leading to financial loss.

DDoS Attacks

Distributed Denial of Service (DDoS) attacks can overload a node’s data transmission capacity, causing malfunctions and disrupting the entire network.

Sybil Attacks

Sybil attacks occur when an attacker creates multiple nodes to control the network.

Reorg Attacks

This attack happens when a node runs outdated software, which may cause it to be left on an incorrect branch of the blockchain, potentially resulting in financial loss for the operator.

Summary

A (Node) plays a crucial role in the blockchain network, especially in data storage and verification. Additionally, nodes are the main drivers that make the world of cryptocurrency interesting and trustworthy.

However, setting up a node remains a new and specialized topic. Interested investors should thoroughly study the details to understand the various risks before investing.