Running a Full Node on the Bitcoin Network — AAX Academy

Like miners, full nodes play a crucial role in maintaining and keeping the Bitcoin network secure.

Due to the benefits of blockchain technology, a decentralized architecture, and a community dedicated to supporting the ecosystem, Bitcoin is a highly resilient network with a nearly 99.99% uptime.

Currently, almost 9,700 full nodes are up and running on the Bitcoin network. However, this number only includes public nodes that are visible for everyone while not counting several others that are hidden by protocols like Tor.

In this article, we will introduce you to full nodes, their benefits, the potential risks of operating one, and how they are different from BTC miners.

What Are Nodes?

In computer systems, nodes refer to physical or virtual devices connected to the network responsible for performing various functions.

No matter if a network is centralized or decentralized, the ecosystem needs a decent number of interconnected nodes to remain functional and process transactions.

That said, unlike traditional solutions utilizing a centralized architecture, blockchains are distributed systems in which users can transact cryptocurrency on a peer-to-peer (P2P) basis without intermediaries.

Instead of a central server, the blockchain is maintained by an extensive network of computers that reach a consensus to validate transactions and add new blocks to the chain.

As a result, the network is truly decentralized, immutable, and censorship-resistant. Anyone can join and participate in the consensus mechanisms of public blockchains like Bitcoin, with no one in the network having more authority than anyone else.

For these reasons, nodes play an even more crucial role in the Bitcoin network.

In the BTC ecosystem, practically any device or computer connected to the Bitcoin interface is considered a node since they act as communication points while performing different functions.

However, not all Bitcoin nodes are equal, with some having more important responsibilities than others.

What Are Full Bitcoin Nodes?

Full nodes are computer devices connected to the Bitcoin network responsible for fully validating existing as well as new transactions and blocks.

In other words, most full nodes download and store every transaction and block since the launch of BTC and verify them to ensure they meet all of Bitcoin’s consensus rules.

We wrote “most” on purpose since it is also possible to run full nodes by using a reduced copy of the blockchain to save storage space (the Bitcoin blockchain is nearly 340 GB large as of April 6, 2021).

Once a transaction or a block gets validated by a full node, it relays the data to other full nodes to reach a consensus.

Examples of consensus rules in the Bitcoin network include:

• Only a certain amount of Bitcoins can be created by each block, which is 6.25 BTC per block since the last BTC halving.
• Transactions must feature correct signatures for the BTC that is being spent.
• Both transactions and blocks must be in the proper data format.
• The output of a transaction can’t be double-spent within a single blockchain.

Interestingly, full nodes do what is right no matter what.

For that reason, in case a transaction or a block violates the consensus rules, it will get rejected even if all the other nodes in the network mark it as valid.

Since they use standardized rules and software (e.g., Bitcoin Core) as well as regularly communicate with each other, it’s easy for full nodes to detect dishonest or malicious nodes. Once they discover one, the corrupt node will automatically get disconnected from the Bitcoin network.

In addition to full nodes, the Bitcoin network features other node types as well, including:

• Supernodes: Supernodes or listening nodes are publicly visible full nodes. In other words, a supernode functions as a redistribution point that provides data to every node that establishes a connection with it. Supernodes are usually operated 24/7 while featuring connections with numerous other nodes in the Bitcoin network.
• Lightweight clients: Lite, lightweight, or simplified payment verification (SPV) clients are the devices and computers connected to the Bitcoin network that do not verify blocks or store a copy of the blockchain. Instead, they function as communication endpoints, gathering their information from full nodes.
• Mining nodes: Miners operate specialized mining equipment (ASICs) to solve complex cryptographic puzzles. In exchange for transfer fees and block rewards, they verify transactions and add new blocks to the chain. For that reason, most miners are also full nodes.

What Is the Difference Between a Bitcoin Miner and a Full Node?

Miners and full nodes are often used interchangeably in the crypto world.

While they serve the same purpose in the Bitcoin ecosystem — to secure and maintain the network –, there are some major differences between full nodes and miners.

As mentioned earlier, miners operate specialized mining rigs to validate blocks and transactions in the Bitcoin network, and they receive rewards and fees in exchange for their work.

On the other hand, full nodes also maintain the ecosystem by communicating with other nodes and validating all blocks and transactions while ensuring they meet the consensus rules. However, full nodes neither have to solve mathematical puzzles nor do they receive rewards for securing the network.

For these reasons, most Bitcoin miners are full nodes, but only a fraction of full nodes are mining BTC.

To better understand the difference between the two, let’s take a look at the process in which miners and full nodes cooperate with each other to validate blocks and transactions:

1. Alicia Keys sends BTC to her coworker Bob Dylan using her wallet.
2. A full node picks up Alicia’s transaction and relays its data throughout the whole network until it reaches all nodes.
3. The miners communicate with the full nodes to pick up the transaction, converting its data into a hash, a unique 32-character string.
4. Miners link Alicia’s transaction with others using their hashes, creating a chain of transactions, which they process into blocks.
5. After miners process the block, it gets linked with the previous block on the distributed ledger using its hash.
6. Upon a complete mining process, the miners will communicate with full nodes, providing them all the data about the newly mined blocks and the transactions within, receiving transaction fees and block rewards in exchange.
7. When the necessary number of confirmations is reached, Alicia’s BTC will arrive at Bob’s Bitcoin wallet.

In summary, full nodes are responsible for storing the Bitcoin blockchain, monitoring miners and other nodes, as well as validating transactions and blocks against consensus rules.

While miners also verify transfers and add new blocks to the chain, they don’t have the duty to enforce Bitcoin consensus rules. Instead, they use their computational power to solve mathematical puzzles while competing with others for block rewards.

What Are the Benefits of Running a Full Node on Bitcoin?

Running a full node on Bitcoin offers multiple benefits for users, which we have collected in this section.

• Securing the network: The more nodes Bitcoin has, the more resilient the network becomes, offering better overall protection against malicious parties and attackers. For that reason, by running a full Bitcoin node, you help maintain and secure the ecosystem.
• Increased privacy: Downloading the entire Bitcoin blockchain is the most private way to hold, send, and receive cryptocurrency via a wallet. Unlike lightweight clients that leak data about your public keys, operating a full node prevents anybody from learning which BTC addresses belong to you.
• Enhanced security: In some scenarios, malicious parties can temporarily trick lightweight clients into accepting invalid blocks or transactions. While this doesn’t present a problem in most cases, it can cause financial losses for those who utilize services that automatically process BTC transfers. On the other hand, full nodes feature enhanced security and protect users against the above scenario.
• Protection against the “evil miner” scenario: Say there’s a hypothetical (yet highly unlikely) scenario in which “evil miners” gain control of the Bitcoin network to adjust its rules to their preferences, for example, by increasing the block rewards. In such a case, lightweight clients wouldn’t resist the changes but do what the majority of miners say instead. On the other hand, full nodes would try to enforce consensus rules. As a result, and since malicious miners have taken over the network, lightweight clients wouldn’t be able to transact with full nodes. If there’s a high number of full nodes in the network, lightweight clients would quickly realize that they can’t send transactions to full nodes and refrain from using the Bitcoin blockchain until the attackers are eliminated. On the flip side, when only a few full nodes are present in the network, lightweight clients would actively utilize BTC solutions, resulting in the malicious miners successfully hijacking the Bitcoin blockchain.
• Faster querying: By running a full node, users have a complete copy of the blockchain on their devices. For that reason, they have access to faster querying, which is especially beneficial for businesses regularly parsing the Bitcoin chain for specific data.

Are There Are Any Risks Involved in Operating a Full Node?

Normally, running a full Bitcoin node doesn’t present any issue for users. However, in some cases, there can be some risks involved.

• Legal issues: Some nations have outright banned cryptocurrencies, preventing citizens from buying, selling, holding, and mining digital assets. In such jurisdictions, it may also be illegal to run a full node on Bitcoin.
• Threats of targeted cyber attacks: Some attackers may launch targeted attacks against full nodes in an attempt to disrupt the Bitcoin network. While attempts to take over the BTC blockchain haven’t been successful to date, they can limit bandwidth and interrupt processes on the devices users utilize to run full nodes. An excellent option to prevent such attacks is to operate hidden nodes via a privacy-oriented service like Tor.
• Antivirus software issues: Some users have deliberately placed known viruses and malware in the Bitcoin blockchain. While they can’t infect or affect your device in any other way, your antivirus software may likely quarantine them, making it harder to download and store the whole chain on your computer.
• Bandwidth usage: Operating a full Bitcoin node comes with increased bandwidth usage. For that reason, running one is not recommended for those users whose internet connections are subject to bandwidth limitations.

Full Nodes: the Key to Keeping Bitcoin Resilient

Full nodes are among the most crucial elements of the Bitcoin network.

In addition to storing the whole blockchain and communicating with other nodes, they also validate transactions and blocks against the BTC consensus rules.

While there could be some risks involved, the more full nodes are up and running, the more secure and resilient Bitcoin gets.

Full nodes offer multiple benefits to the users operating them, and in the next article we will explore how to set up and run one for yourself.

Originally published at https://academy.aaxpro.com on April 6, 2021.