What are the different types of Bitcoin nodes? How the Bitcoin network is maintained

Without Bitcoin nodes, Bitcoin as we know it would only be a concept known by a few computer scientists.

Bitcoin nodes are the underlying infrastructure of the Bitcoin network, which secures and maintains it. But despite their importance, Bitcoin nodes are often misunderstood or not understood at all.

In this article, we will explore what Bitcoin nodes are, as well as the different types of Bitcoin nodes and their role in the Bitcoin network.

What is Bitcoin?

When most people say “Bitcoin” they are referring to Bitcoin cryptocurrency. But Bitcoin is more than that:

• Bitcoin is a network; It is a collection of interconnected computers that share information.
• Bitcoin is a protocol; there is a set of rules for how information can be shared on the network.
• Bitcoin is software; it is a computer program that knows the protocol rules and is run by computers on the network so that they can share information with each other.

It can be confusing to use the same word to describe different (though certainly related) things. For the sake of this paragraph, we will use the following terms to refer to the different uses of “Bitcoin”:

• BTC describes the Bitcoin cryptocurrency, which people buy, sell and trade.
• Bitcoin software describes the Bitcoin protocol rules that are encoded into a language that computers understand so that they can be used to connect and share information about BTC transactions.
• Bitcoin network describes the network of interconnected computers, each running its own version of the Bitcoin software.

These differentiations provide useful context for explaining the different types of Bitcoin nodes. Before discussing Bitcoin nodes specifically, it is worth briefly discussing at a high level what nodes are.

What are nodes?

In general, a node is a point on a network. For example, a car is a node on a network of highways, or a work colleague is a node in a professional network.

In the world of computers, nodes are devices connected to a computer network that transmits, processes and stores information.

Nodes consist of two things: hardware and software. Hardware is the physical things – microchips, processors, etc. – that are required to run software. Software is a set of instructions that can be stored and run by hardware.

For example, the smartphone is a node on the internet. The apps you run (browsers, messaging apps, maps, etc.) are software that can connect to the internet and give it instructions on the type of information to be sent, received, and stored (such as websites, text messages, and directions). These instructions and pieces of information are processed and stored on tangible pieces of hardware inside the phone and other computers connected to the Internet.

Compared to the internet and mobile phones, the Bitcoin network and Bitcoin nodes are extremely simple. While the Internet and mobile phones are designed to transmit and store all kinds of information, the Bitcoin network and Bitcoin nodes are designed to transmit and store one type of information – data that represents BTC transactions.

What are Bitcoin nodes?

Bitcoin nodes are computers that run Bitcoin software and is connected Bitcoin network. Bitcoin nodes validate, broadcast, process and store BTC transactions.

BTC transactions are grouped and stored in groups called blocks. This is the concept blockchain comes from – historical transactions stored in blocks that are linked together. Before a block is added to the block chain, nodes must confirm that the block’s transactions are valid.

This confirmation involves checking things as if the same BTC was used twice, or if a sender actually has the BTC they are trying to send. The process by which individual nodes collectively agree on the validity of a block (and the transactions it contains) before it is added to the block chain is known as consensus.

Because Bitcoin is a peer-to-peer payment system, it does not have intermediaries or intermediaries to enforce consensus rules on the Bitcoin network. Therefore, nodes must reach consensus among themselves. They do this using the Bitcoin software.

In addition to the Bitcoin protocol rules, the Bitcoin software includes a complete copy of the Bitcoin blockchain. So when a node downloads the Bitcoin software and connects to the Bitcoin network, it has the same transaction history and operates on the same set of transaction verification rules as all other Bitcoin nodes. In this way, when a new transaction is sent to the network, each node does its own work to check the validity of a transaction.

Similarly, when a new block is sent to the network, each node decides whether to add it to its copy of the block chain or not. This design allows nodes to untrustingly verify BTC transactions and blocks.

Types of Bitcoin nodes

A useful framework for understanding the different types of Bitcoin nodes is, what role does the node play in adding blocks to the blockchain?

The main types of Bitcoin node

Remember that Bitcoin nodes broadcast, validate, process and store BTC transactions – and blocks are collections of valid BTC transactions.

Full node

When a transaction occurs, a full node picks it up. Full sheet music save the entire blockchain and can completely verify all the rules of the Bitcoin network using the Bitcoin software. A full node checks the validity of the transaction against the blockchain history and set of rules encoded in the Bitcoin software.

If the transaction is valid, the entire node broadcasts it to other nodes it is connected to. These nodes go through the same confirmation process. When a sufficient number of full nodes agree that the transaction is valid, it is added to a pool of other valid transactions.

Miners

Mining nodes, or miners, pick up transactions from this pool and wrap them in blocks.

Miners run a version of the Bitcoin software that contains special rules for creating and proposing blocks for the Bitcoin network. This includes things like how big a block can be, how to format transactions and how to sign a block.

Miners compete against each other in a race to make the next block. When a miner thinks it has created a valid block, it sends the proposed block to other nodes on the Bitcoin network.

Full nodes pick up the block, and in a similar way to how they validate a single transaction, they verify the validity of the block according to the rules encoded in the Bitcoin software they run. If a full node considers a block to be valid, it adds the block to its respective copy of the blockchain, sends it to the Bitcoin network, and other nodes go through the same verification process.

When a sufficient number of nodes validates the block and adds it to the copy of the block chain, consensus is reached. At this point, the transactions in the block are processed, all nodes confirm and store the updated version of the block chain, and miners begin the race to create the next block.

Mining: Full nodes vs miners

Miners are encouraged to create and propose valid blocks because the miner whose block is added to the blockchain receives a reward. This block reward consists of newly embossed BTC pre-programmed in the Bitcoin software, plus BTC-denominated fees for all transactions in the block.

Mining is competitive and expensive. If a miner proposes an invalid block (for example with fake transactions), the block is rejected by other nodes and the miner is not rewarded for the time and money spent on creating the block. Therefore, miners are encouraged to propose only valid blocks.

A key difference between full nodes and miners is that miners can propose new blocks to the Bitcoin network, and full nodes cannot. By extension, miners can receive block rewards while full nodes cannot.

The resource intensity of mining means that miners must use specialized, powerful hardware designed specifically to create and propose new blocks. On the other hand, full nodes can run on most laptops, and even a Raspberry Pi.

This brings us to the third and final primary type of Bitcoin node – light nodes.

Light notes

Light notes run a special version of Bitcoin software that stores, as the name implies, a lightweight version of the blockchain. This version of the blockchain contains block heads, which are codes in each block that basically say “this block is valid”. This allows light nodes to connect and execute transactions on the Bitcoin network, without having to save the entire history.

More importantly, however, this means that light nodes can not independently verify the Bitcoin network rules and therefore must connect to full nodes to get the block data.

Mobile wallets are the most common example of lightweight nodes. Most cell phones (with one or two exceptions) are not powerful enough to run a full node, and are certainly not powerful enough to power a miner. But they are powerful enough to store a compressed version of the blockchain with information on wallets addresses BTC balance. If you have sent or received BTC from your phone, your device is a node on the Bitcoin network!

Other types of Bitcoin nodes

Full nodes, miners and light nodes are the main types of Bitcoin nodes. However, there are some other types of nodes that are often mentioned and that require descriptions.

• ⚡ Quick notes: lightning is a network built on top of the Bitcoin network so people can trade BTC faster and cheaper. Lightning nodes coordinate this activity.
• 🗄️ Archive nodes: Also known as full archive nodes, archive nodes are synonymous with full nodes; they store a complete copy of the blockchain and can verify all Bitcoin network rules. The differentiation stems from the fact that people sometimes divide full nodes into two types – archive nodes and cropped nodes.
• ✂️ Cropped nodes: Cropped nodes store the entire blockchain history up to a certain size. When this size limit is reached, they begin deleting or cropping previous blocks so that they can save full versions of new blocks. Cropped nodes are smaller than full nodes, but larger than light nodes.
• ⛏️ Mining basin nodes: Mining basin nodes orchestrate mining activity from groups of miners so that they can gather resources to extract new blocks. When a mining pool node creates a block that is added to the blockchain, the node distributes the block reward to miners in proportion to the amount of resources. Miners like mining pools because it means they get paid more consistently. For example, instead of getting 10 BTC every 100 blocks, they can get 1 BTC every 10 blocks.

Summary

Bitcoin nodes are computers connected to the Bitcoin network that run Bitcoin software to broadcast, validate, process and store BTC transactions and blocks. There are three main types of Bitcoin nodes.

• Full sheet music validate transactions and blocks without trust to reach a consensus on the transaction history. In this way, full nodes ultimately determine which blocks are added to the block.
• Miners organize transactions in blocks that they then propose to the Bitcoin network. If a miner’s block is added to the blockchain, the miner gets the block reward. In this way, miners facilitate the new circulation of BTC.
• Light notes save a reduced version of the Bitcoin blockchain by connecting full nodes. In this way, light nodes allow BTC transactions on low power devices such as mobile phones.

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