Have you ever made a Bitcoin transaction and then waited for it to be verified by someone else? What if you could verify your own transactions? You can. In fact, by operating your own full Bitcoin node, you not only verify your transactions, but you also are in complete control of your money. And contrary to wide speculation, running a node is not as complicated as being a Bitcoin miner. So, what is a node and how exactly does running one help you and the Bitcoin Network?
Just as with any protocol, there are many technical aspects to the Bitcoin Network. Mining is one aspect, and it requires a fairly high degree of technical prowess. It’s also resource intensive. For the average crypto user, running a node is a much more realistic and important way of participating in Bitcoin.
What is a Node?
A node is essentially a computer that is attached to the Bitcoin network. It takes part in running the network by verifying transactions and blocks. No matter who you are and where you live, you can run a node. Unlike mining, which requires more hardware and resources, running a node can be done from a computer with adequate storage and bandwidth.
The Bitcoin network is distributed across thousands of nodes all over the world, making it decentralized. When you have your own node, you have your own communication portal with the Bitcoin network. This gives you control of your money while contributing to the health of the protocol.
When you hear about big companies getting hacked, it is the centralization of the company’s servers that creates a single point of failure. Meaning if their server gets hacked, all their company and customer data are at risk. With the Bitcoin Network, the distribution of nodes serves as a remedy to the vulnerabilities posed by centralization.
How many full Bitcoin nodes exist?
If you were to do a count today, you’d find over 10,000 full Bitcoin nodes distributed widely across the globe. This includes those that are run openly. (There are others that may run without broadcasting or may be hidden, but for this article, we are referring to openly run full Bitcoin nodes.)
Even in countries with a larger concentration of nodes, such as Germany and the US, the distribution is spread broadly across different regions. This number of nodes can ebb and flow depending on the current environment. For instance, right now we’ve been in a long bear market yet Bitcoin transactions remain strong. In the last 24 hours, the transactions per day average
What do the nodes do?
The most important function that a full Bitcoin node serves is acting as the authoritative verifier of every Bitcoin transaction and block (blocks are what store recent transactional data). The Bitcoin protocol enables a node to communicate with other nodes, helping them to connect with a set of peers to find transactions that need verification.
In the process of verifying a Bitcoin transaction, a node will:
- Communicate with other nodes
- Monitor its peers’ transactions
- Independently verify each aspect of a transaction
- Authoritatively reconcile the transaction to its own copy of the blockchain
- Makes sure funds have not been double spent
If an incorrect transaction pops up, it will be rejected by the other nodes monitoring it. Depending on the level of ‘incorrectness’, it may be dropped off the Network for an hour, or it may get banned altogether. At that point, the others will no longer communicate with it.
“A node is a computer that is participating in the global Bitcoin Network by speaking a protocol that is called bitcoin.” – Andreas Antonopoulos
Why would you want to run a Bitcoin node?
The reasons for running a Bitcoin node fall into two major categories:
Benefits for the Bitcoin user:
- It’s less technologically and resource intensive than bitcoin mining, so a little more reachable to the average Bitcoin user.
- You no longer have to rely on 3rd party servers to broadcast your transactions for you. These 3rd parties would know which are your wallet addresses.
- You can enjoy the feeling of contributing to the success of the Network.
- Complete control of your money is possible – you can verify your own transactions instead of waiting for them to be verified. You can also use the node’s wallet to store your Bitcoin.
- You have a high level of financial privacy.
- Running a full node is the only way to validate the rules of a new or old blockchain in the case of a fork. You can validate the rules of either one, whichever you choose. Otherwise, this choice is made for you.
Benefits for the Bitcoin Network
- Each transaction and block has its own authoritative verifier.
- Consensus rules are enforced.
- Nodes make sure the Network keeps running and that all rules are followed.
- The actions of the nodes enable a faster and more stable Network.
- Nodes are an integral part of the Network’s decentralization.
The logistics of running a full Bitcoin node
Special equipment is not necessarily required. You’ll need a preferably dedicated desktop computer or laptop that’s running a recent version of Windows, Linux or Mac OS X.
This device will need:
- 250 gigabytes of available disc space
- 2-3 gigabytes of monthly bandwidth
- 2 gigabytes of ram
- A dual or 4-core CPU
- Broadband Internet connection with upload speeds of at least 400 kilobits per second.
You’ll also need to run your node at least 6 hours a day; optimally it would be running continuously. While its running, you can use the device to do other things. Additionally, auto sleep modes would need to be disabled.
Generally, your home PC and internet connection would suffice in allowing you to run a Bitcoin node.
How to set it up
Before you prepare yourself for setting up your own, be aware of these problems that may arise:
- Legal problems. Bitcoin may be illegal in your region. You can check your home country here: https://blog.sagipl.com/legality-of-cryptocurrency-by-country/
- Your Internet provider may charge you for what they consider to be excessive upload bandwidth. Conceivably, they could also terminate your connection due to overuse. Before deciding to run one, check with your Internet provider for such restrictions. In some areas, there are several providers to choose from, so in this case, you could shop around for the best option.
- There are some instances where people have put viruses on the Bitcoin blockchain. While it can’t infect your device, your antivirus software may not like it. For the most part, this would only affect Windows users.
If you’re ready to contribute to the Bitcoin network and take control of your financial privacy, running a node might be just the thing for you. In that case, you can head over to Bitcoin.org where complete instructions for each of the three operating systems are available. In addition, a community of Bitcoin users
At HedgeTrade, we encourage our community to actively participate in the crypto community. Running a Bitcoin node is a great way to get involved and feel you are part of something big. Be sure to join us for more explainers and updates on our upcoming Beta release of the HedgeTrade predictions platform. We look forward to having you along with us on our blockchain journey!