Blockchain nodes act as the connecting bridges in the cryptocurrency ecosystem, where the infrastructure is based on peer-to-peer technology. This technology leverages blockchain nodes to enable communication within blockchain networks. Ideally, blockchain nodes are designed to store complete copies of the information recorded on distributed ledgers such as Bitcoin’s blockchain.
Unlike centralized ecosystems, blockchain technology is built on decentralized infrastructure, which means that network users can contribute to its sustainability. Blockchain nodes enable crypto users to participate in the operation of distributed ledgers by allowing them to validate and relay transactions to the base layer. In addition, these nodes are responsible for the correctness of on-chain recorded data hence playing a significant role in the runtime of blockchain networks.
Practically, blockchain nodes are the only way to connect with a blockchain network. In crypto, their value proposition can be seen in various networks, including Bitcoin and Ethereum, where node validators confirm transactions, build new blocks, and participate in the network consensus. Each node validator stores a full copy of the blockchain records, ultimately functioning as a network of connected computers.
The Value Proposition of Blockchain Nodes
Blockchain nodes propose a significant value in maintaining the decentralized nature of crypto ecosystems. In essence, this network of ‘computers’ operates as decentralized supporting points to blockchain platforms. So, for instance, anyone can set up a Bitcoin node to join the network as long as they meet the requirements to run a node.
Notably, there are various levels from which Bitcoin node validators can choose to contribute to its network. One of the options is to run a full node that enforces all the Bitcoin rules or a lightweight node which only stores a small part of the information recorded on the blockchain. The latter type of node uses fewer resources, allowing node validators to minimize their costs while contributing to the network.
So, what’s the monetary value of running a blockchain node? For starters, node validators receive a small compensation from the transactions passed through their channels. This form of incentive is what keeps the blockchain engine running as it attracts more node validators, increasing the network’s decentralized nature. In addition to the monetary incentives, node validators also get to experience blockchain networks first-hand.
As more people join the crypto market, one of the niches that newbies and veterans can easily pivot to is node validating. Currently, Bitcoin’s blockchain enjoys the largest number of validators with over 12,900 nodes at the time of writing. However, setting up a full Bitcoin node may not be as easy. This process requires robust equipment accompanied with over 500 GB free disk space, high-performance SSDs and a reliable internet connection that can download at a speed of 50 KB per second.
Luckily, Bitcoin’s blockchain is not the only crypto network where users can contribute to node validation. Upcoming blockchain protocols such as Minima now allow crypto users to run full contracting and validating nodes from their gadgets, including smartphones. This ultra-lean blockchain protocol revolutionizes the concept of blockchain nodes through IoT devices.
Furthermore, Minima features an incentive program that rewards users who download the protocol’s application to run and maintain a complete node. This program rewards users with 1x Minima coin every day, which are credited to the balance weekly. The Minima protocol also features a DApp development platform that enables scalability through Minima’s Layer-2 solution, Maxima.
That said, the growing crypto ecosystem continues to provide more opportunities for users to participate in node validation. This is especially the case for nascent DeFi innovations looking to cement their decentralized architecture further.
A Fast-Growing Niche
The crypto market is one of the fastest-growing ecosystems, with the market cap recently surpassing the $2 trillion mark, although it has since retreated after the May 2021 bloodbath. Therefore, it is crucial to maintain the fundamental aspects that define this burgeoning industry with such a promising outlook.
One of the ways that crypto can maintain its relevance on the decentralization front is by attracting more node validators. In doing so, it becomes harder to compromise blockchain networks, given that a wider network of nodes reduces the possibility of collision to alter the transactions that have already been recorded on-chain.
It is also noteworthy that the income incentives for blockchain node validators go a long way in motivating network participation. Programs such as the one offered by the Minima blockchain protocol will play a significant role in attracting more node validators into the crypto ecosystem. This approach also brings the industry closer to achieving fully decentralized networks.
There are many ways to earn a living from the crypto market. However, node validation is one of the few income-generating avenues that allows users to contribute to the growth of blockchain networks simultaneously. Essentially, blockchain nodes serve as a backbone of this industry by enabling a decentralized infrastructure and featuring incentives where users can make a few bucks. By making node validation more accessible, crypto projects stand a greater chance of building sustainable decentralized networks.