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How do nodes work on a blockchain network?
Written by Davies on / Reading time: 3 minutes.
We are used to hear people talking about nodes in the field of cryptocurrencies, so we want to make a stop in this concept to deepen its definition. Although a part of society has already heard of virtual currencies, many people are unaware of the true functioning of the blockchain technology. Are you ready to learn more about it?
What is a node?
Before moving on to the substance of this post, we want to solve all your doubts about nodes. This concept refers to systems or programs that connect with each other, so we can define them as a point of union between them. It may be a simple computer containing the software of a certain cryptocurrency. Do you know how many Bitcoin nodes exist around the world? More than 10,000.
Now that you know what a node is, we want to emphasize the existing types of nodes.
What are the variants of nodes in the crypto world?
The blockchain technology is made up of a P2P architecture, which means that the people participating in the network are the same. Each of them is a node, and, according to Sitepoint, we can differentiate them according to their function:
- VALIDATION. "A validation node is a node which validates the information, makes sure it’s true, and passes the information along to other nodes, thus enabling the transfer of monetary value from location A to location B. Mining nodes are a subsetof validation nodes, because every mining node is also a validation node.”
- "A mining node is a validation node which also uses the hardware of your own or a rented machine to guess the combinations of numbers and letters needed to validate and verify a block. A mining node can team upwith other nodes and send guesses to a common pool (pool mining) to increase chances of guessing, but then counts as only one node.”
In summary, the mining nodes are responsible of guessing the combination needed to give the block as valid, seal it and confirm it, while validation nodes are in charge of validating and be sure that the operation is true. At this point, the information is passed to other nodes.
Everything clear so far, isn't it?
Everything we are telling you is closely related to mining. Cryptocurrencies need miners. The nodes are operated by them to give their approval. They are responsible for seal them, so that they create new Bitcoins, or any cryptocurrency with which they work and facilitate the process.
Traditionally, the monetary transaction has been registered in our banks, but with the new virtual currencies, the process has changed. Let's say that the model proposed by the blockchain technology records are performed by the entire network, in a decentralized way and providing a high degree of transparency and security.
Thousands of nodes act interconnected among themselves and their task resides in verify transactions and apply them in the blockchain in a public way.
Transparency and security of cryptocurrencies
They are the two fundamental values provided by the blockchain technology. Like everything in life, this chain of blocks presents a series of advantages and some problems. It carries out the registration and storage of data in a secure, immutable, transparent and decentralized way. Its revolution has already formed what is known as the Internet of Value, questioning the future of economies and societies.
How the blockchain will influence industries? How will it transform their operation?
Although the blockchain technology was born from the financial environment of the hand of cryptocurrencies, their applications will not be exclusive of this sector. On the contrary, different industries have put their look in its operation (energy industry, public sector, the 4.0 world, health, the mass media, etc.).