Everything you need to know about running a Bitcoin node
Bitcoin delivers its promise as a decentralized alternative to fiat currency through active participation from society. This participation usually comes in the form of users, miners and nodes. In this article we learn what a Bitcoin node is, the different types of nodes, the benefits of running a node, and finally, how you can also run a bitcoin node and be part of / contribute to the BTC network.
What is a Bitcoin Node?
Bitcoin blockchain is a decentralized general ledger that is duplicated and maintained independently on hundreds of thousands of computers worldwide. Each of these computers has its own copy of the entire blockchain and has the task of verifying transactions and updating itself. These computers are known as nodes.
In simpler terms, a Bitcoin node is a computer with its own duplicate copy of the entire BTC blockchain that it continuously verifies and updates. The presence of nodes is primarily for the function and safety of the BTC blockchain.
As someone who runs a node, you become one of the millions who make sure that no erroneous, unconfirmed or false data enters the blockchain.
Types of Bitcoin nodes
There are two primary types of Bitcoin nodes – full nodes and light nodes (or light nodes). The third type of node is an improved version of a full node known as a mining node. Let’s learn what each type of node means and how it works:
Full sheet music
According to the Bitcoin Core documentation, “a full node is a program that fully validates transactions and blocks. Almost all full nodes also support the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then forwarding them to additional full nodes. ” As a result, running a full node requires plenty of storage space as well as download and upload capacity.
Light notes
Light nodes, on the other hand, rely on full nodes for their function. They do not store the entire blockchain, but instead verify transactions through simplified payment verification (SPV).
They do not need the high storage, since they do not store the entire ledger, nor do they require the high download / upload speeds required to manage full nodes. Light nodes are an addition that improves the decentralized character of BTC, and ensures that more participants can join the network even without the excessive hardware requirements.
Mining nodes
Full nodes on the BTC network can also be used to extract Bitcoin when equipped with sufficient data and processing capabilities.
In addition to hosting the entire blockchain, mining nodes also solve complex cryptographic puzzles to add new blocks and earn recently embossed BTC. Each miner in the network competes to be the first node to create a new block and prove that it has done the work. Once this is done, the miner is rewarded with a certain number of Bitcoins.
Now that we’ve learned the different types of nodes – let’s answer the bigger question of why someone should run their own node?
Benefits of running a Bitcoin Node:
A way to really understand how Bitcoin works
Bitcoin is complicated enough that a public will never fully understand. When you run a node, it opens doors for a greater understanding of how the Bitcoin network works and how every little piece of the puzzle contributes to the bigger picture.
From the hardware required for its function to the setup of the node, it is a practical learning process that is incomparable to just reading or learning about it indirectly.
Support the network
When you run a Bitcoin node, you are helping to make the BTC network stronger and more impenetrable than it already is. The more nodes on the network, the greater the security. This means that there are more nodes that keep track of the transactions and the distributed nature of the bitcoin ledger is improved.
Privacy
Any kind of operation (transactions, blockchain exploration, verification, etc.) that you perform on the Bitcoin network, you connect with a node. When the node is not your own, you depend on a node operated by someone else to help you with the operation.
This indirect connection to a node means that you trust your ISP or other parties not to store your IP information related to that operation. There are steps to ensure that this does not happen, but the only way you can be sure is to run your own node.
By running your own node, you know that no data from you will be tracked or stored anywhere. You can also use block explorers on your own node to check and verify any transaction that dates back to the origin of the network.
Make money by routing transactions
A common misconception among enthusiasts is that the only way to make money on the BTC network is through mining. However, with layer 2 payment protocols such as Lightning Network, you can earn a small percentage of the transaction amount as a reward for running node and route transactions.
NOTE: This is only possible when running both the BTC node and the layer 2 node node. With the BTC node itself, there is currently no way to make money.
How to run a Bitcoin Node?
Now that you know what a Bitcoin node is and how it helps the Bitcoin network, here’s how to run one on your own PC.
To get started, you must have the following requirements – a computer running on the latest version of Windows, MacOS or Linux, 7 GB of free disk space with a read / write speed of at least 100 MB / s, an unmeasured broadband Internet connection at a speed of at least 400 kbps, and 6 hours of secure operation of the setup per day.
Once you have all the requirements, install the latest version of Bitcoin Core for your operating system. Install the program, choose where the data will be stored, let the program go through the firewall and follow the steps shown in the program. You can also get step-by-step installation instructions here.
Conclusion
Running a Bitcoin full node comes with its own set of risks. First, it may be illegal to run the bitcoin node in your geographic location. Second, network usage can sometimes exceed limits (if any) and result in higher electricity bills. Finally, running a node can expose you to viruses, if not done with appropriate precautions.
Bitcoin is a revolutionary value store and an alternative to fiat currency. Before you choose to invest time, money and effort into it, it is important that you understand all aspects of it – pros as well as cons – to take advantage of this possible future currency. The same goes for running a BTC node.
