Blockchain technology won’t be cool without nodes running things in the background. Nodes are crucial components responsible for pretty much everything, from its decentralized nature to its functionality and security.
So what exactly are blockchain nodes, and why should anyone care about understanding them?
Well, let’s find out.
Understanding Blockchain Nodes
Blockchain nodes are a set of computers or devices that participate in the blockchain network. Participation in this case means that the device runs blockchain software and maintains a copy of the blockchain ledger.
Nodes play a vital role by maintaining a copy of the blockchain, validating transactions, and contributing to the network’s decentralized structure.
Without nodes, the blockchain is pretty much useless and can’t function as a distributed ledger system.
Types of Blockchain Nodes
Now, we know that blockchains rely on nodes to function. Now, we’ll look at the different node types you’ll find on major blockchain networks. There are four main types of blockchain nodes: full nodes, light nodes (SPV nodes), mining nodes, and master nodes.
- Full nodes: think of these types of nodes as the backbones of the blockchain. The full nodes’ jobs include storing the entire ledger and verifying all blocks and transactions. Moreover, full nodes ensure that all participants adhere to the network’s rules. Another function of the full node is to maintain the network’s security and accuracy. They serve as a reference point for other nodes in the network.
- Light nodes (SPV nodes): SPV means “Simplified Payment Verification” and these node types can only store a small portion of the blockchain data. Light nodes are created for devices with limited storage or capabilities to process large data—phones, IoT devices, you name it. They always fall back to the full nodes to get the necessary information to perform their tasks. While this makes them more efficient, they can’t really work on their own.
- Mining nodes: coming in third place are mining nodes, which are the most popular, thanks to Proof-of-Work blockchains. As the name implies, these nodes are primarily responsible for validating transactions and creating new blocks. They also help secure the blockchain network from issues like double spending or 51% attacks.
- Master node: You can see these nodes as the upgraded versions of the full nodes. They perform more advanced tasks like special transactions and improving privacy features of the network. They are also tasked with powering decentralized applications. Master nodes are essentially the four walls holding the blockchain structure together. So, their operators often stake more cryptocurrency in the system than other node operators.
Roles and Responsibilities of Nodes
Blockchain nodes are responsible for multiple critical functions, all of which, contribute to network’s performance.
Here are four of the most vital roles:
- Validating transactions: When a new transaction enters the network, the nodes compare it to other transactions in the entire blockchain to ensure its authenticity. Once it’s validated, they then add it to the ledger by creating a new block or merging it into another.
- Maintaining consensus: another critical function of nodes is making sure every version or copy of the blockchain is the same. This process is known as network consensus, and it is why people can rely on any information retrieved from the blockchain as the single source of truth.
- Propagating data across the network: blockchain nodes also serve as information carriers, spreading new and existing data throughout the entire network. This makes sure that every node in the blockchain remains up-to-date.
- Securing the blockchain: most importantly, nodes work together to make sure the blockchain is fully protected from any external or even internal manipulations.
Importance of Nodes in Blockchain
You’re already aware that nodes are important to the blockchain. But in what areas precisely? The key areas include the network’s decentralization, security, resilience, and trust or transparency.
Let’s touch on each one.
- Decentralization: Nodes distribute control across the network, preventing any single point of failure or centralized authority. This decentralized structure enhances the system’s robustness and resistance to manipulation, making blockchain a powerful tool for creating trust in various applications.
- Security: The presence of multiple nodes significantly enhances the blockchain’s security. By maintaining copies of the ledger and validating transactions collectively, nodes create a system that is extremely difficult to compromise. This distributed security model protects against fraudulent activities and malicious attacks.
- Resilience: Thanks to its distributed nature, the blockchain network can continue functioning even if some nodes fail or go offline. This high level of resilience ensures the continuity and reliability of blockchain-based services, making them suitable for critical applications.
- Trust and Transparency: Nodes help maintain a transparent and trustworthy ledger that all participants can verify independently. This transparency is fundamental to blockchain’s ability to create trust without the need for intermediaries, revolutionizing how we approach data integrity and verification.
- Consensus Maintenance: Nodes play a crucial role in achieving and maintaining network consensus. By working together to validate transactions and blocks, nodes ensure that all participants agree on the state of the blockchain, creating a single source of truth.
- Data Propagation: Nodes efficiently communicate and share information throughout the network, ensuring that all participants have access to the most up-to-date version of the blockchain. This rapid data propagation is essential for maintaining the network’s consistency and responsiveness.
How Nodes Communicate and Reach Consensus
Nodes are usually scattered all over the world—it’s what makes the blockchain decentralized. So, how do they communicate with each other and reach consensus? Let’s go a bit further to explain how it works.
Let’s first cover communication protocols. You can view communication protocols as the rules and standards that dictate how nodes share information within the blockchain network. Popular blockchain networks usually use peer-to-peer (P2P) protocols to achieve this.
P2P allows nodes to discover and connect with each other dynamically within the network. The protocol ensures efficient and secure data transmission, allowing nodes to stay synchronized and up-to-date.
Nodes use communication protocols to:
- Broadcast new transactions to the network
- Propagate newly mined or validated blocks
- Request and receive blockchain data from other nodes
- Verify the integrity of received information
The next is the consensus mechanisms. Think of Proof of Work, Proof of Stake, or even Proof of Staked Authority, which is used on the Chiliz Chain. We refer to all these as consensus mechanisms. The main functions of these mechanisms are to allow the network participants to collectively agree on the current state of the blockchain and validate new additions to the ledger.
Real-World Applications and Examples
Finally, we’ll look at some real-world examples of nodes in action. Some major applications include cryptocurrencies like Bitcoin, supply chain management like Walmart, and decentralized platforms like Socios.com.
- Cryptocurrencies: In Bitcoin, nodes maintain the integrity of transactions and the overall ledger by validating each transaction and ensuring that all copies of the blockchain are consistent. Full nodes store the entire blockchain, while mining nodes participate in the creation of new blocks through the Proof of Work consensus mechanism.
- Supply Chain Management: Walmart uses blockchain nodes to track and verify the movement of goods throughout its supply chain. Each node records transactions at various points. This allows Walmart to quickly trace product origins, enhancing transparency and accountability in food safety.
- Decentralized Applications (dApps): Platforms like Socios.com rely on nodes to support their operations. Nodes execute smart contracts that facilitate fan interactions, such as voting on club decisions or purchasing fan tokens. This decentralized infrastructure ensures secure and transparent engagement between fans and their favorite sports teams.
Chiliz Chain Validator Network
Chiliz Chain’s Proof of Staked Authority (PoSA) consensus mechanism introduces an initial system of 11 world-class validators (nodes), responsible for relaying votes, executing proposals, and validating blocks, ensuring the network runs smoothly and securely.
Chiliz Chain has brought trusted, world-renowned institutions from blockchain, sports, finance, tech, and energy together to create an expert validator network dedicated to shaping a future for Web3 sport that protects and creates opportunities for fans, teams, and brands.
Chiliz Chain’s top-tier validator network sets the gold standard in on-chain governance. Validators include blockchain leaders OKX, Animoca Brands and Ankr, finance giants SBI holdings and France’s state-owned energy provider EDF Group, as well as the world’s first sports team validator, Paris Saint-Germain, and Asia’s No.1 football league – K League.
Chiliz Chain has the largest mainstream sports partner network in blockchain, and a massive potential mainstream audience. We see it as our responsibility to provide educational materials that relate to the entire sector, increasing security, understanding and adoption of this incredible technology.
