Cryptocurrency is the currency of the blockchain ecosystem, facilitating financial transactions for services and products like Bitcoin, Litecoin, Ethereum, and Dogecoin. But with no central authority for transactions to pass through, how are payments verified? The answer lies with nodes, which validate payments and secure the decentralized network.
What is a Blockchain Node?
A blockchain node is a crucial component of a blockchain network. It can be a computer or specialized hardware that keeps track of information and transactions on the distributed ledger. Each node runs the blockchain protocol software, processes transactions, and validates the legitimacy of subsequently added blocks. Moreover, nodes have unique identifiers that differentiate them from each other.
In a blockchain network, nodes communicate with one another. The more nodes that join the network, the more decentralized the network becomes. Decentralization makes the network more secure and less susceptible to hacking attempts. Unlike centralized networks, decentralized networks are not governed by central servers. Instead, they rely on nodes to govern operations.
Types of Blockchain Nodes
Blockchain nodes serve different purposes and have varying levels of participation in the network. Some nodes perform general tasks, while others have specific functions, such as storing information on the distributed ledger without processing transactions or adding blocks. The following is a list of different types of blockchain nodes:
Full nodes are the servers that store and maintain the transaction history of a decentralized network. They copy, distribute, and synchronize the data across other nodes while validating new blocks. Full nodes enable decentralized networks to have a reliable database without relying on a centralized database. There are two types of full nodes: pruned and archival.
Pruned Full Node
Pruned full nodes have limited memory space, only storing the most recent blocks and data in the blockchain database. After downloading the blockchain, they delete the oldest blocks to make space for the most recent ones, which helps validate the authenticity of new blocks. Pruned nodes prioritize the security of the blockchain over the storage of transaction records.
Archival Full Node
Archival nodes operate on large memory space because they store the complete blockchain ledger down to the genesis block. They are more common than the pruned full nodes. There are four types of archival nodes: staking nodes, authority nodes, master nodes, and miner nodes.
Staking nodes are selected using a staking methodology by locking up cryptocurrency as collateral. Blockchains with a proof-of-stake consensus mechanism select nodes to confirm blocks of transactions. It is possible to operate staking nodes individually or set up staking pools to combine funds from many users. In this way, a group has a better chance of being chosen to confirm blocks.
Authority nodes are typically used in blockchains with vetting processes for selecting nodes. These nodes are chosen or elected by the community or blockchain managers. Proof-of-authority blockchains only use nodes run by verified node operators. Authority nodes are commonly used in private or partially centralized blockchains, also known as permissioned blockchains.
Master nodes validate transactions and verify new blocks but cannot add new blocks to the blockchain. They often operate on a collateral-based system, known as staking. Master nodes differ from common nodes and play a crucial role in blockchain governance. However, due to their constant activity, they require more electricity and memory space than basic nodes.
These are the nodes that participate in verifying and updating transactions’ records on the blockchain network. After complex algorithms and mathematical problems are solved, the successful node adds a new block to the existing chain of blocks. The successful node will also receive new coins (for example, Bitcoin miners currently receive 6.25 bitcoins, which will decrease as more halving is done).
Light nodes prioritize essential data for immediate operation, processing only simple and fast transactions that do not require the entire blockchain. They only store block headers containing the minimum data necessary for basic transaction verification. Blockchain headers identify each block in a blockchain.
Lightning nodes connect the blockchain network to the lightning network, enabling smooth and efficient interactions. In Bitcoin, lightning networks enhance off-chain user transactions without recording them on the blockchain. This results in cheaper and faster transaction fees.
Blockchain nodes aren’t the miners; most nodes generally verify transactions, while the advanced ones verify and can add new blocks to the blockchain ledger. Blockchain miners are entities or organizations that contribute computational power to the blockchain network through specialized software and hardware computers. As miners contribute to transaction verification and advanced computations, it can be said that all miners are nodes, but not all nodes are miners.
Blockchain is the future, and it is impressive to see Identity.com contributing to this desired future through the Solana ecosystem and other Web3 projects. Also, as a member of the World Wide Web Consortium (W3C), the standards body for the World Wide Web.
Identity.com, as a future-oriented company, is an open-source ecosystem providing access to on-chain and secure identity verification for businesses, giving their customers a hassle-free experience. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes. Please refer to our docs about how to help you with identity verification and general KYC processes.