What Is a Node?

In crypto, nodes are an integral part of the blockchain to validate transactions and keep the network safe.

Updated May 11, 2023 at 6:04 p.m. UTC

In computer science, the term "node" simply means a device that plays a part in a larger network.

In the context of crypto and blockchain, a node is one of the computers that run the blockchain’s software to validate and store the complete history of transactions on the network.

How nodes work?

Blockchains are distributed ledgers that store the complete history of transactions on a certain network. It is a sequence (chain) of sets (blocks) of transactions that everyone in the network agreed to be legitimate.

If you wondered where the blockchain is – it is in the nodes. Each node holds an identical version of the transactions.

When there’s a new group of transactions (a block) on the blockchain, it gets broadcast from node to node so that every one of them can update its own database in the same way.

You may have heard that a blockchain network is "distributed" and "peer-to-peer." This is because nodes are responsible for maintaining the correct database of past transactions in a distributed way, validating each other’s dealings on the network.

Who can run a node?

In traditional finance, payment networks such as Visa or Paypal are held by a central administration.

In the case of most cryptocurrencies, the nodes of a blockchain do not rely on any validation from the top of the system because they check and verify each other by a consensus mechanism.

Thus, anyone can set up a node by downloading the blockchain’s software onto their personal computer anywhere in the world.

This article was originally published on May 13, 2022 at 6:32 p.m. UTC

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Benedict George is a freelance writer for CoinDesk. He has worked as a reporter on European oil markets since 2019 at Argus Media and his work has appeared in BreakerMag, MoneyWeek and The Sunday Times. He does not hold any cryptocurrency.


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