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What Is a Bitcoin Node? A Guide for Beginners

How to evaluate the security of a cryptocurrency? One could easily claim that secure cryptos need to run on a secure blockchain. However, this theoretical statement can have complex applications in the real world.

One way to look at the matter is by connecting security to validation. Every blockchain must have a suitable transaction validation mechanism. When it comes to blockchain validation, we generally mention nodes.

Today we will talk about Bitcoin nodes. The article aims to explain a very technical concept in simple terms. After understanding this notion, it will be possible to address more complex discourses on the subject.

Understanding what Bitcoin nodes are

Let’s start with a fundamental concept of the blockchain world: the peer-to-peer (P2P) network. Each Bitcoin block is part of a chain, representing a virtual ledger. But how can we be sure that hackers won’t alter the chain for their benefit?

Theoretically, hackers could steal Bitcoin by altering the composition of a chain. This operation, however, must overcome several obstacles, including the P2P network. In practice, many connected computers preserve the formatting of the entire blockchain.

Each of these computers becomes a “node” in the Bitcoin blockchain. If a group of hackers decides to attack a node by altering the blockchain, the other nodes react immediately.

This reaction restores the blockchain under attack to its original state, introducing a level of resilience into the system. In more general terms, the role of Bitcoin nodes is to regulate transactions in the network.

If we see the nodes as a group of system arbitrators, the whole matter appears more straightforward. The node communicates the change to the other nodes whenever mining adds a block to the chain.

However, anyone who tries to add an irregular knot to the chain will be unsuccessful in their attempt.  

Benefits of running a Bitcoin node

Anyone following our talk will probably have an essential question at this point. Is it possible to turn your computer into a node of the Bitcoin network? If so, what are the benefits of this operation?

The short answer is that yes, anyone can run a Bitcoin node. The benefits related to the execution of a node are different, and we summarize them below:

Privacy

A block explorer is not an anonymous method of purchasing Bitcoins. Whenever we let a block explorer execute a transaction, we share sensitive information.

A block explorer knows your IP address, which it can share with third parties. Combining this information with your transaction history makes the problem clear. Running a Bitcoin node eliminates the issue since you do not need to share your data with anyone.

Don’t forget that whoever owns your IP address can know your physical location. Therefore, criminals may locate a hazardous consequence where wealthy Bitcoin owners live.

Security

You can hide your private key during the transaction by running your Bitcoin node. Since anyone knowing your private key can access your wallet, this is crucial to protect your savings.

Hiding a key does not mean you will not sign a transaction since the Bitcoin system would reject the operation. You will always need to use your digital signature, but no one will retrieve your private key.

Forget about the “middle man”

Another perk comes with running a Bitcoin node, and crypto enthusiasts typically appreciate it. The original goal of blockchain technology was to remove a centralized authority without intermediaries.

In this context, the idea of relying on a third party to access the Bitcoin network may seem strange. However, if we remove the block explorer, several complications can arise.

How can we verify that there are no more Bitcoins than the maximum supply with a single computer? Remembering that this limit equals 21 million tokens, it is clear that the solution comes from the P2P network.

A constant connection among nodes, without intermediaries, makes system maintenance quicker and more direct. Reading the famous whitepaper that led to the birth of Bitcoin, this concept appears aligned with the idea of its founder.

Help the infrastructure become stronger

Let’s quickly go back to the subject of a hacker attack on a P2P network. A hypothetical case in which a group of hackers could alter the Bitcoin blockchain.

Suppose a new blockchain has ten nodes, entering the market as a tiny system. Then, in the Bitcoin world, the attack on a single node would not affect the integrity of the blockchain.

There can be problems when hackers manage to attack most of the nodes. Again, if we go back to the example, a 6-node coordinated attack can cause the validation of irregular blocks.

Therefore, it is clear that the Bitcoin system requires many nodes. The good news is that the most famous estimate is that there are over 200,000 active nodes. Running a new node in the system can increase the security of the Bitcoin blockchain.

How can you run a Bitcoin node?

There are three different methods to run a Bitcoin node. There is no better strategy among those listed below, and the choice depends on your technical skills:

Local execution

If you have at least 350 gigabytes free on your computer, you can run a Bitcoin node locally. However, keep in mind that your computer will need at least 2 Gb of RAM, a simple requirement in the modern world.

Considering that you will be using your internet to connect to the P2P system, it is good to have a good contract with a service provider. The best choice, in this case, is to have an unlimited upload and download contract.

It is not difficult to find a list of the minimum requirements to run a local system node online. After overcoming this obstacle, we can download the Bitcoin Core software and run a node.

Leveraging the cloud technology

Everything we have said about local execution works more simply on a cloud system. In this case, you don’t have to worry about checking the technical characteristics of your computer.

Many common cloud computing services have paid plans suitable for this purpose. Generally, this is a more practical choice than local execution. The only aspect to consider is the reliability of the cloud provider you choose.

An easier option

If none of the above options seem right for you, there is an easier way to proceed. Some providers can take care of the whole pipeline for you. If you want more information about their price, you can look up “Bitcoin node in a box solutions”.

However, don’t forget that this choice doesn’t remove the “middle man” in the system. You will run a Bitcoin node via a graphical interface, but you will be relying on a third party.

Final thoughts

Today we discovered more information about the “referees” of the Bitcoin system. The nodes guarantee the integrity of the blockchain through the P2P infrastructure.

Each of us can run a Bitcoin node with several benefits that deserve a critical assessment. The system has introduced various ways to run a Bitcoin node, responding to broad market demand.

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How you run a Bitcoin node depends on our preferences and technical skills, without forgetting your purpose. Removing the “middle man” remains one of the primary aims of the blockchain universe.

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