The node definition may vary depending on the context. In this guide, we will explain what this term means in the crypto space.
What Is A Node?
A node is a computer connected to a blockchain network that participates in validating and propagating transactions and blocks. The number of nodes in a blockchain varies depending on the specific cryptocurrency. Some of the largest networks, such as Bitcoin and Ethereum, feature thousands of nodes.
What You Need To Know About Nodes
Each node performs several checks on the transactions it receives:
- Input validation: The node verifies that the inputs used in the transaction are unspent and belong to the sender.
- Signature verification: It checks that the transaction is properly signed by the sender.
- Fee validation: The node confirms that the fee included in the transaction is sufficient to cover its processing costs.
- Double-spend protection: It ensures that the transaction is not a double-spend attempt, i.e., the same funds are not being spent twice.
- Consensus rule compliance: The node checks that the transaction conforms to the consensus rules of the network, such as transaction size limits and other restrictions.
If a transaction passes these checks, the node will propagate it to other nodes on the network, and it may be included in a block and added to the blockchain; if not – it will be rejected.
The node system is crucial for decentralization as it helps to distribute the power and responsibilities required to maintain a blockchain network among multiple participants.
The absence of nodes would lead to the blockchain being controlled by a central entity, which would mean a higher likelihood of censorship, fraud, and other forms of manipulation.
There are two main node types:
- Full nodes that store a full copy of the blockchain and perform all necessary validation and propagation tasks.
- Light nodes that don’t keep the entire blockchain copy and rely on full nodes to provide them with necessary information.
Note that there are many other node subtypes that have their specific areas of focus, such as mining nodes, archival nodes, and beyond.
