What Are Blockchain Nodes and How Do They Work? | Built In (2024)

A blockchain node is any device that runs a blockchain’s protocol software and connects to its network. Nodes are moderators that build the infrastructure of a decentralized network, essentially acting as stakeholders for the blockchain itself. Their primary function is to maintain consensus of a blockchain’s public ledger, which varies from one type of node to the next.

Routers, modems, switches, hubs, servers and printers — basically, anything that has an IP address — can serve as a node.

What Is a Blockchain Node?

To understand what role a node plays within a blockchain, let’s first deconstruct the blockchain itself. Simply put, blockchains are decentralized, immutable, digital ledgers shared across a peer-to-peer network. Acting as a database, transaction data is permanently recorded, stored and encrypted onto the “blocks” that are then “chained” together. The physical, electronic devices (a computer, typically) that maintain copies of the chains webbing a network together, keeping the blockchain operational, are called nodes.

“On the most basic level, a node is simply a device running the software of a specific blockchain,” explained Till Wendler, co-founder of Peaq, a blockchain platform developed with the intent to actualize the Economy of Things.

Connecting to a network is like surfing the internet, explained Stanislav Zhdanovich, a developer who customizes blockchains at MetaLamp. Nodes serve the same function as a browser would — it knows the specific network protocol, which makes it capable of interaction with other nodes of the system, he said.

Zhdanovich noted that being part of a protocol is voluntary. Nothing is at stake, and any node can exit anytime.

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How Do Blockchain Nodes Work?

Operationally speaking, there are three main purposes a node fulfills: maintenance, validation and accessibility.

Nodes Perform Blockchain Maintenance

Nodes are the custodians of a blockchain. They keep all copies of the ledger in sync, storing encrypted data of past transactions while taking on new blocks for scalable growth.

Nodes Validate Transactions and Proposals

Nodes are algorithmically programmed to execute transactions based on a majority consensus. Peer nodes accept or reject proposals: Those that are authenticated get added to the blockchain, copied and distributed network-wide while unapproved proposals are killed. Consensus mechanisms ensure that all nodes remain in sync. New blocks are processed live, and all copies of the ledger instantaneously update. In agreement, nodes unanimously reflect the true state of a network.

Nodes Store Blockchain Data and Keep It Transparent

Nodes are the storage containers of a blockchain. So, any time an in-network user retrieves information, they are interacting with a node. They remain completely transparent and accessible to anyone.

As an example, Wendler points to Polkadot, an open-source, layer-0 blockchain that acts as a framework beneath the layer-1 blockchains (or parachains) that run on top of the main network (labeled the relay chain).

Collator nodes, a unique feature to Polkadot, act as a touchpoint that synchronizes parachains with the relay chain as well as facilitating communication between parachains. To do this, collator nodes simultaneously run a full node of their respective parachain and a full node of the relay chain.

To note, Polkadot hosts many different types of nodes. While collator nodes function as messengers, validator nodes support the consensus mechanism, keeping the transaction record straight and up-to-date. Neither of these node types would be able to function without the archival nodes, however, which store and maintain the network’s transaction history in full.

“This positions them as a crucial communications channel between the target parachain and the relay chain, and, by extension, with other parachains in the ecosystem,” Wendler explained, singling out the platform’s cross-connecting capabilities as the main reason why his company will be operating on a parachain. “Interoperability is crucial for the Web3 space as it enables users to leverage hundreds of decentralized applications across a variety of networks, and Polkadot offers a native interoperability capacity that’s unmatched in the blockchain space. It’s hard to understate how important that is.”

Why Are Blockchain Nodes Needed?

A blockchain has no central authority, so network control is democratized across an elected team of nodes instead. Nodes join forces to fulfill mechanisms of utility and governance, such as authenticating transactions and executing decision-making protocols. Additionally, all tokens and smart contracts on a blockchain exist only within a node. Without nodes, blockchains would essentially lose their infrastructure.

“Nodes are the source of truth for a blockchain,” said Nicholas Edmonds, lead blockchain engineer at Topl, an impact tech company building blockchain applications that track, tokenize and monetize industry sustainability.

Since authority is split across various nodes, they also uphold the principle of decentralization on a blockchain. The more nodes a blockchain hosts, the more decentralized it will be. A high node count ensures resilience to a network, populating majority-rule systems while increasing the difficulty level for infiltration, outnumbering the enemy.

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10 Types of Blockchain Nodes

Blockchain nodes are grouped by the functions they perform. Despite their differences, all nodes work toward maintaining the integrity of a network.

Zhdanovich, whose Haskell programming language skills helped create third-generation blockchain platform Cardano, noted that developers consider two factors when building out a blockchain platform and the nodes that will regulate it.

First, one blockchain protocol can require a multitude of nodes, with each fulfilling complementary roles in a network’s ecosystem. A general, seven-node network, for example, may be inclusive of four computers, a router, a printer and a remote device. The configuration will correlate to a blockchain’s specific needs.

Additionally, nodes may vary by their level of engagement in a protocol. Some may validate all block history while others only pitch in a portion of storage space. In other words, all nodes are not created equally.

1. Full Node

Full nodes are the servers of a decentralized network. They preserve a blockchain’s transaction history, sync, store, copy and distribute data while also validating new blocks. They continuously regulate rule adherence, creating a trustworthy database that stays honest.

There are two types of full nodes: pruned and archival.

2. Pruned Full Node

The main characteristic of a pruned full node is its set memory limit. “Pruning” begins upon installation, where the node downloads a blockchain in its entirety and begins deleting all but the metadata (in order to maintain sequence) from its oldest blocks, retaining only the most recent entries, until capacity is reached. It does not possess a complete copy of the ledger it serves, allowing its function to prioritize security over storage.

3. Archival Full Node

Archival full nodes store the entire blockchain ledger, recording all transactions up to its genesis block. These are the most common types of nodes, and can be categorized in four groups: authority nodes, miner nodes, staking nodes and master nodes.

4. Authority Nodes

Authority nodes are elected by a community to act as moderators of a private or partially centralized blockchain.

5. Mining Nodes

Incentivized by freshly minted cryptocurrency, mining nodes verify transactions using a proof-of-work consensus model, a validation method that relies on arbitrary cryptographic puzzles, in order to unlock tokens and add new blocks to a blockchain. With this, these auditing entities, commonly referred to as miners, compete to solve complex mathematical problems that require sophisticated, energy-intensive computing devices for a payout. Miners are computers, typically working in a group, that are owned by an entity, such as an individual or company. Bitcoin uses this mechanism as part of its governance method.

Miners receive Bitcoin as a reward for solving a block. The bounty halves every four years, or every 210,000 newly generated blocks. Oftentimes, miners form a joint group to combine computational resources, known as a mining pool, to widen their gait in the race for the prize.

Miners vs. Nodes

Both miners and nodes are tasked with verifying and facilitating transactions on a blockchain. While nodes don’t have to be miners, a miner is a node with benefits. These benefits include the ability to generate new blocks on a blockchain and reaping a payout — often in the form of tokens — from the validation process, or “completing” a block. Nodes can simply act as a server, receiving, storing and broadcasting transaction data, in the likes of a directory.

6. Master Nodes

These full node types validate transactions and maintain records. They do not generate new blocks.

7. Staking Nodes

These nodes use a method known as “staking” in their authentication process. Using locked funds as collateral, a proof-of-stake consensus model randomly designates authentication powers to participants who have met predetermined metrics, such as contributing a certain amount of tokens to the protocol or logging in a certain number of hours on a network.

8. Light Nodes

Second to archival nodes in usage popularity, these nodes are designed for fast, simple processing of transactions and daily activities. They are equipped with only the essential data and depend on full nodes to function, as they do not download the full blockchain.

9. Lightning Nodes

To counteract network congestion, lightning nodes execute transactions off-chain through separate, out-of-network connections. Once processed, the transactions are added to the main blockchain. This workaround makes for low-cost, instantaneous exchanges while lightening the load on the network.

10. Super Nodes

Rarest of the node variations, super nodes are created on demand to perform specialized tasks, such as implementing protocol changes or maintaining protocols.

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