Incentivized Bitcoin Nodes

We already have them.

As the price of bitcoin has fallen over the last eighteen months and subsequently stagnated in 2015 — in perpetual decline since its brief near-parity with gold — so has the average number of nodes declined with it.

The most powerful forces in economics are always the abstract, the potential, and the silent. As Hernando de Soto once put it, this is the mystery of capital. Yet most of the common focus is on the loud, the kinetic, and the tangible. This is fine; we like to be entertained. But when it informs ideas and decision-making, it is no longer fine. See the broken window fallacy for a great introduction to this notion.

As the number of bitcoin nodes has declined, every so often springs up a post or an article, “THE PROTOCOL SHOULD INCENTIVIZE NODES” or “PSA: Please run a full node,” and the like. But these beg the question: why?

Why should I run a full node? Why should anyone?

In fact, I am confident that you, early adopter speculating on bitcoin’s probable voyage dans la lune, will in time run a full node — when you have incentive to do so.

The top 500 addresses contain 32% of all bitcoin.

But if bitcoin increases in price and propagates to tens of thousands, hundreds of thousands, and ultimately millions of new users as we all hope it will, the incentive to run full nodes increases exponentially. What is that incentive?

The maintenance of the integrity of your own wealth is the incentive to run a node.

Even if I personally have 20BTC on 12 May 2015, that’s less than $5,000. Why invest more in the integrity of this than the security of my house, my laptop, or my car?

You do not need 100,000 full nodes to maintain the integrity of a measly $3.3 billion USD market cap. In fact, the current 6,000 nodes are more than enough. That’s already a miraculous level of network security for a network of negligible value.

When bitcoin’s potential energy becomes kinetic, full nodes will follow in its wake because full nodes are representative of wealth and the people who own that wealth. People often mistakenly refer to (traditional) money as capital. But with bitcoin, that is no mistake. It is money, it is capital, and soon it will be capital for money itself of all colors and denominations. That is its unrealized value that when realized will beget increased network integrity (e.g. full nodes).

The incentive (read: bitcoin’s value to its individual holder) to run a full node is ever-present and adjusts accordingly as nodes are only an extension of capital in its ultimate abstraction: the blockchain.

By WIFI_Reilly

Learn how to run a full node here.

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WIFI Metropolis is a crowdsourced WiFi network and application that incentivizes users to add hotspots to a shared network with bitcoin.

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