Blockchain Nodes Explained

Nodes are an essential piece of blockchain technology. In fact, they are the infrastructure that enables one of the blockchain’s main unique features — its decentralization. 

The blockchain is a database ledger distributed across multiple nodes. These nodes synchronize the ledger data using a particular communication protocol called “Gossip protocol”.  

A node will broadcast data to neighboring nodes, and those nodes continue to broadcast to their neighboring nodes, and so on, and so forth until all nodes in the network have received the data. This peer-to-peer network of nodes is the core layer of blockchain architecture. 

What Are Nodes? 

The definition of nodes can vary depending on the context, or between applications and the protocol in question. In general terms, a node is a point of connection in a data communication network. For example, your office setup might have a router, a scanner, and five laptops. Each one is a node and has a unique identifier allowing it to be distinguished from the others.  

They create, receive, store, or send information to the other nodes in the network.    

In this office example, all the devices/nodes are connected through a central server, whereas blockchain nodes are connected in a decentralized, peer-to-peer network where no single entity has full control of the data.   

What are Blockchain Nodes and What Do They Do? 

Generally speaking, a blockchain node is like a server that helps to maintain the blockchain’s transaction record. However, not all nodes are required to keep this full record because not all nodes have the same functionality or purpose. We’ll go into this in greater detail a little later. 

The different roles nodes play depends upon the particular requirements of the blockchain network. For example, Corda Blockchain has two node types, one for the client and one for validating transactions. 

However, we can summarize the basic functions of blockchain nodes with the following:  

• Accepting or rejecting transactions made on the blockchain 
  
• Checking transaction/data validity  
  
• Storing all data in cryptographically linked blocks 
  
• Communicating with the other nodes within the network  

Nodes are a vital component of the blockchain, they allow it to be decentralized and ensure the integrity of the data. Without nodes, there would be no block and no chain. 

Types of Blockchain Nodes 

Blockchain node types depend on the specific blockchain, that said, there are two main types of nodes- full nodes and light nodes. 

Full nodes  

Full nodes, also known as fully validating nodes, are pretty much the servers of the blockchain. They are responsible for storing a copy of the entire blockchain record, submitting and verifying new blocks of transactions in accordance with the blockchain’s consensus rules.  

They also play a part in the blockchain’s governance. For example, when any blockchain improvements or upgrades are proposed, full nodes have the voting power to accept or reject them.  

There may be times when no clear majority agrees, for example, if 55% of nodes are for a proposal, but 45% are not. This can create what is known as a hard fork in the blockchain. In this case, 55% of nodes will work with the changes, while 45% continue as normal.  

However, not all full nodes have the same functions. Full nodes can be further categorized as pruned nodes and archival nodes. 

Pruned nodes 

A pruned full node is exactly as it sounds... a full node, pruned. As a full node, it can verify transactions and be involved in the blockchain consensus, but instead of storing the complete blockchain ledger, it has a set limit of how many blocks it can store.  

It will download the blocks from the beginning but when the pruned node’s limit is met, it will “delete” the oldest blocks to make room for the latest. It doesn’t completely delete the old block info – instead it saves only the essential block headers and chain placement to maintain the integrity of the chain. 

Archival nodes 

The only real difference between an archival node and a pruned node is the amount of data space. Where pruned nodes have limited space, archival nodes maintain the full blockchain. Archival full nodes are what most people imagine a “full node” to be, but they can be further divided into subsets of nodes that can add blocks to the blockchain and nodes that can’t.  

Mining, staking, and authority nodes are all types of archival nodes- all with slightly different functions. 

Mining nodes 

Mining nodes are archival full nodes that CAN add blocks to the chain. Often called “miners”, they use hardware components such as CPUs, GPUs, or ASICs to solve complex cryptographic problems, validating the transactions within each block.  

The first participating mining node to do so broadcasts their proof of work to the blockchain. If the other nodes verify it and consensus is achieved, then that miner adds the block to the chain and is rewarded with the transaction fees in the block as a reward.  

Staking nodes 

Staking nodes work in a similar way to miner nodes — they can also add blocks, validate transactions, and get rewarded for doing so. However, the consensus mechanism employed is quite different.  

Firstly, stakers must hold crypto coins and offer a specified amount as collateral for the opportunity to validate blocks. Taking into consideration coinage staked and time spent on the network, staker nodes are then selected at random to validate the block.  

Staking nodes require less computational power than mining nodes, which is a plus for the environment and we should see more staking nodes in the future. 

Authority nodes 

In public blockchains, anyone can run a node and participate in maintaining the ledger. In private blockchains, however, where access to data may need to be restricted, authority nodes come into play. These nodes are not only responsible for creating and validating new blocks in the blockchain but they can also authorize other nodes to join the network or gain access to a particular data channel. 

Master nodes 

Masternodes are archival nodes that cannot, in their own right, add blocks to the chain. Their only function is to keep a record of transactions and validate them. On some blockchains, masternodes also have voting rights for any proposals of modifications to the consensus.  

Running a master node requires significant financial investment, including hosting fees, running costs, and a substantial stake in cryptocurrency as collateral.  However, it can bring passive income as master nodes receive a percentage of every block reward. 

Light nodes and special nodes 

Light nodes, often referred to as “lightweight nodes” depend on full nodes to function. They don’t download the full blockchain, but only the block headers, storing and providing just the necessary data. They provide simplified payment verification (SPV), enabling faster transactions and accommodating daily activities or faster transactions. 

Special nodes include super nodes, also called listening nodes and lightning nodes. Super nodes carry out special tasks such as implementing protocol changes or maintaining the protocols while lightning nodes avoid congestion on the network.  

Running Your Own Node vs. Node Providers 

If you want to do anything on the blockchain then you need to communicate with a node. You can run a node yourself, which for personal projects might be okay. But when it comes to building a dApp business, the cons can far outweigh the pros. 

The pros of self-running nodes 

Running your own node can have its benefits- you're strengthening the blockchain network you are making use of, and you can broadcast your own transactions. Having no third party involved can mean total privacy and security for your keys. 

The cons of running your own nodes 

Firstly, there is the equipment and setup costs. Master nodes especially require large initial investments and different blockchains have different requirements when it comes to the strengths of hardware. 

This can get expensive since most dApps require access to multiple blockchains, meaning you’ll need to run multiple nodes for each network. When you want to scale your business, this will only get more complicated.  

Then there is the need for proper setup and synchronization, both of which require expert skills to ensure smooth running.  The smallest mistake can result in a node needing to be re-synced from scratch which can take weeks. Nodes also require regular maintenance, including de-bugging or re-syncing when it crashes or times out due to congestion on the network.   

The benefits of node providers 

Node providers remove the stress and expense of running your own nodes. They offer dApp developers a quicker, easier, cheaper, and more convenient way to access the blockchain without any of the engineering, maintaining, or managing headaches.   

With no more worries regarding bandwidth limits, guaranteeing uptime, providing consistency, upgrading equipment, or ensuring node security, you can concentrate on building your dApp and providing the best UX possible. 

Most node providers also give you the option of accessing shared nodes or dedicated nodes.   

Both options are more stable than accessing public nodes which may crash when congested and have a limit on requests. They are also easier to connect to (using an API) than trying to connect to a public node.  

Shared nodes 

Shared nodes are pretty self-explanatory – you share the nodes with other businesses. This is an inexpensive way to access the blockchain as sharing helps keep the hosting costs down, which are reflected in the fees you’ll pay to the provider. This can be an ideal solution for enterprises with lighter blockchain traffic or startups just testing the web3 waters. 

Dedicated nodes 

For businesses with high-load blockchain traffic, from such applications as wallets, DEXs, or games, dedicated nodes will be the better option. These are private nodes accessed exclusively by you. Dedicated nodes will have their own unique address, connection, and authentication key giving greater privacy, security, and control. 

Understanding Blockchain Nodes 

Getting to grips with blockchain nodes helps lower the cost of dApp development and simplifies the process of accessing blockchain infrastructure. By leveraging node type, functions, availability, and computational power, businesses can optimize their solutions for the blockchain market. 

If you're looking for a reliable blockchain node provider, you can contact Crypto APIs to find out more about how our infrastructure can ensure consistency, scalability, reliability and security for your project.