What Is a Node?

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.

Read More: How Does Bitcoin Mining Work?

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

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.