Blockchain technology powers everything from cryptocurrencies to decentralized applications, but at the heart of it all lies a crucial component: the node. Whether you're a developer, investor, or tech enthusiast, understanding what blockchain nodes are and how they work is essential to grasping the mechanics of decentralized systems.

Please sit down and make yourself comfortable. In this guide, I'll discuss:

So, let`s start!

What are nodes and why are they important for blockchain?

Blockchain is a type of distributed database that contains information about all transactions made by participants and consists of a chain of sequentially linked blocks.

Copies of this registry are stored on various devices that are synchronized with each other, ensuring the decentralization of the system. This fundamentally distinguishes blockchain from centralized networks that operate on a client-server basis.

Nodes are the devices that store copies of the blockchain and add blocks with new transactions to the chain as part of the consensus mechanism.

Technically, nodes consist of:

Depending on the requirements of the blockchain, a node can be deployed using a personal computer, as well as a rented virtual (VPS) or dedicated server with a powerful configuration.

Important. For any blockchain, a node is a basic structural unit. Without independent nodes, the very existence of a decentralized network is impossible, so project teams often encourage the launch of nodes in the early stages of development.

Main functions of nodes

A blockchain can include several types of nodes to solve different tasks. We will discuss this further. Still, the core of the network is the class of full nodes, which perform the following functions:

Note. Storing an ever-growing database is becoming a problem for many projects, as it increases the technical requirements for node deployment. For example, as of June 2025, more than 1.3 TB of free space is required to synchronize a full Ethereum node. And these requirements increase significantly if you need to run an archive node with a complete history of the network status. For example, the Near archive node occupied 28.4 TB in March 2024 and more than 29.1 TB in August. You can calculate this yourself by executing the commands specified in the official Near Discord channel.

All basic nodes perform these tasks, but to better understand how blockchain actually works, let's take a closer look at all existing node types and their functions.

Types of nodes

In addition to the basic functions listed above, nodes may be assigned additional tasks that require special configuration or software, so the blockchain architecture is in fact a network of interconnected nodes with different functions.

Depending on the tasks performed and the configuration, nodes are divided into several categories.

Light nodes

Light nodes store only partial transaction data, so they cannot verify blocks on their own and must rely on full nodes when synchronizing the database. Of the basic functions listed above, they can only fully provide access to the blockchain, so they are often installed by users who do not want to rely on third-party infrastructure when interacting with the network.

The main advantage is low technical requirements and easy startup. Light nodes are supported by almost all blockchains.

Full nodes

Full nodes, unlike lightweight nodes, store the entire transaction history, which expands the possibilities for interacting with the blockchain. At the same time, such devices are divided into several subcategories:

There are also two categories of nodes that do not belong to the general hierarchy:

It is worth noting that not all nodes are available for free deployment. While a full node or validator can be deployed without permission, a masternode or authority node requires permission to run.

Nodes, clients, and miners: what's the difference?

In various guides, the terms node, client, and miner may be used interchangeably. In some cases, this substitution is justified by the context, but more often than not, it causes confusion and misleads beginners. So:

By the way, you may wonder what are oracles. Oracles are nodes that transmit information from external systems to the blockchain. An example of such data could be the current value of currencies for a blockchain-based exchange service. A script oracle is needed to convert the information into a form that is understandable to a smart contract. The validator then verifies the data from the oracle along with all other information in the blockchain. At the same time, the signal from one oracle is verified by a large number of validators, which increases the overall security of the network.

What are the advantages for node owners?

As a rule, when people talk about the advantages of running their own node, they mainly mean earning money from processing transactions. However, deploying a full node can provide a number of additional advantages when interacting with the blockchain. These include:

As you can see, even without financial incentives, in some cases, launching a node can be the optimal solution for secure and stable interaction with the network and asset storage.

Earning money on nodes: possible sources of income

Now let's move on to the question of how much you can earn with nodes?

Rewards from projects

Developers often announce reward programs for node operators to test the load on the project, fix bugs, and stimulate user growth in the early stages after launch. Some teams reward operators retrospectively (including after a long period of time) without an incentive program.

Important. The size of such rewards may vary from project to project and does not always cover the costs of maintaining a node. As with drop hunting, this is a high-risk activity.

Transaction processing fees

A way for miners or validators to earn income. The amount of income here is also difficult to predict, since for PoW networks it depends on the power of the equipment, and for PoS — on the size of the stake. In general, the greater the investment, the higher the potential income. Only relevant for the main network.

Note. You can calculate the approximate income from mining or transaction validation using special calculators. Here are examples of such services for Ethereum, Polkadot, and Bitcoin. However, you need to make adjustments for the market situation and the dollar value of the asset.

Receiving delegation

Asset delegation is available in many PoS networks and hybrid blockchains such as Solana or Tezos. It allows users to transfer assets to a validator node operator in exchange for a portion of their income from processing transactions. For example, Solana users can earn up to 7% per annum for delegating their funds.

For node owners, this is an opportunity to increase their chances of being selected as a validator (which directly depends on the size of their stake) and, accordingly, to earn more income from commissions.

In addition, node operators charge delegators a small fee for their services. That is, the more delegations they manage to attract, the higher their potential earnings will be. Many project teams also practice creating funds that provide delegation to validators. It can be obtained for assistance in the early stages of project development and participation in the testnet. This aspect is a disadvantage in the context of decentralization, as the team directly decides who validates the network.

This is not very relevant for ordinary users, as it is difficult for an individual to obtain large delegations: you need a team, security measures, and trust from the community. But there are always exceptions.

Earning money by providing infrastructure

Since users without nodes have to rely on infrastructure providers, node operators can provide public or private access to the blockchain for a fee.

As with delegations, this is more of a case for a team than an individual user, as it involves launching a full-fledged business with all the associated costs.

Earning money on nodes: possible expenses

Like any business, launching a node requires an initial investment. Below, we will discuss the main categories of expenses.

Equipment

Home computers or smartphones, rented virtual and dedicated servers are used to deploy nodes. The higher the technical requirements for the node and the more nodes the user plans to launch, the more expensive it will be to rent or purchase equipment.

It should also be noted that when participating in early testnets, the user receives compensation only after the project is launched on the main network. During this entire period, which usually lasts from six months to two years, it is necessary to maintain the infrastructure. If a home server is used, additional expenses will be required for the maintenance of uninterruptible power supply devices, stable internet, and memory disks.

Stake

The initial investment for validators includes the stake required to launch a node. In theory, this amount is not considered an expense, as it can be returned after the node is shut down during normal validator operation.

Staking involves locking up cryptocurrency, which is subject to high volatility. In most networks, you have to wait a certain amount of time before withdrawing assets from a deposit contract. For example, in the Cosmos ecosystem, this period is usually 21 days, while in Ethereum, it can vary, but on average it is 5-10 days, depending on the network load.

You also need to consider the risk of slashing, although this mechanism is not used in all networks. Part of the stake may be “written off” as a penalty for node failures. These failures can be caused by power outages, hosting disruptions, and other factors.

Salaries

This is also an optional expense for those who plan to launch several nodes or do not intend to deploy and maintain them themselves. In this case, you will need to hire one or more specialists to monitor the status of the nodes (connection, updates, maintenance, etc.).

Important. Launching and maintaining a node also involves risks that can affect the amount of rewards and capital investment: sudden changes in market conditions, technical problems, or attacks on the network. All of this can make it difficult to receive rewards, require additional investment, or even lead to losses.

Launching and maintaining a node

Now let's move on from the theoretical to the practical part of the article. Beginners should pause at this point and familiarize themselves with the basics of how blockchain works in order to better understand the opportunities and risks that may arise when working with nodes. You will also need a basic understanding of how Linux and the command line work. If you already have the necessary training, let's move on.

Deploying a node

The first launch and debugging of a node is the most difficult stage for beginners. To simplify the process, let's break down the deployment procedure into several stages.

Step 1: Preparation

This includes familiarizing yourself with the technical requirements of the node and selecting a hosting provider. Technical requirements are usually published on the official project website or in a separate section for node operators. Here, for example, are the recommended specifications for Ethereum node hardware.

Based on this data, you can start choosing a hosting provider. This can be a dedicated server, a VPS, or an independent solution — a home server based on standard equipment or, for example, a Raspberry Pi.

The most popular option is to rent a server, as this means fewer problems and lower equipment maintenance costs for the user. In addition, hosting providers will ensure stable operation of the equipment without the customer's involvement. List of the most popular providers:

AWS, Azure, SpaceCore, PerfectQaulity, Webtropia, and other cloud solutions are used by node operators.

When choosing a server, the first thing to do is to test the disk speeds. In most cases, the YABS benchmark, which is run with the command below, is sufficient.

The acceptable speed range is from 150 Mbit to 500 Mbit, which SSDs can easily handle. If you need higher speeds, you should look for a server with NVMe. As for HDDs, they can be used in part when launching archive nodes to store the complete history of the network.

When choosing a dedicated server, it is recommended to check the wear of the disks. You can use various programs, many use the smartmontools program, which only works with NVME disks. Install the smartmontools program sudo apt-get install smartmontools -y, view the connected disks with the command fdisk –list, and check each one with the command smartctl -a /dev/nvme1_disk_name. The percentage of wear is displayed in the Percentage Used line.

By the way, you can see what network validators use with the help of Observatory. Here is an example of Cosmos Hub.

Step 2: Install the software

To install and debug a node, you only need basic Linux knowledge and the ability to search for information using services such as Google. You will also need to learn how to use the command line. Otherwise, the instructions from the developers for launching nodes are correct in most cases, and you just need to follow them correctly. You can familiarize yourself with the installation method using the example of a Bitcoin network node here.

It will be more difficult with projects that are in the development or testnet stage — their instructions are often incomplete, or unexpected errors may occur during execution, so you will have to communicate frequently with the team and experienced operators. But in general, the principle is the same.

Step 3: Monitoring performance

After deploying the node and synchronizing the database, you will need to continue monitoring the status of the node and supporting its stable operation. The following tools can be used to track performance:

To stay up to date with news and changes, join communities dedicated to this topic and specific projects. This will allow you to quickly receive information, solve emerging problems together with other participants, and share your experience.

Node security

Once a node is launched, it is equally important to protect it from attacks aimed at blocking its operation or gaining control over it. This is a critical aspect for validators, who incur financial losses in the event of node failures or unusual behavior. Possible attack vectors on nodes deployed on Linux systems include:

In a DDoS attack, an attacker sends multiple requests with the aim of “clogging” the node and causing it to crash. Basic protection against DDoS includes installing a firewall and deploying a network of sentry nodes with which the validator can communicate without revealing its address. Such nodes are constantly connected to the network and synchronized. This type of node is available in blockchains such as Polygon, Cosmos, and Sui.

Note. Hosting providers usually block such traffic and notify users of DDoS attacks (in some cases, the user's server may be blocked during a DDoS attack). However, in general, DDoS attacks on validators and even more so on ordinary nodes are unlikely due to their high cost.

Another attack vector is brute force, i.e., an attempt to gain control over a node by selecting data for access. The formula for excluding brute force is quite simple: disable root privileges in combination with a non-standard login and password. You can also install Fail2ban with a stock configuration to protect the server. Alternatively, you can create an SSH channel and connect to the server using a key, disabling the login and password connection. The protocol checks the connection using a public key stored on your computer and a private key stored on your server.

Note. If you lose your public SSH key and disable login and password connections, you will lose access to the server.

A more sophisticated way to capture a node is social engineering. This is when an operator is persuaded, under some pretext, to install third-party software or transfer their data to access the node. The most common tool is installer bots. The user is offered convenient software that will automatically deploy and configure the node. Newbies look for such solutions, but the risk is very high. We recommend avoiding the installation of third-party software under any circumstances.

For validators in Cosmos ecosystem networks

To protect and ensure the smooth operation of validators in Cosmos ecosystem networks, you can also use remote signers — software that is installed on a third-party server and used to sign blocks. Several nodes connect to such software, so even if the main validator is compromised or goes offline, work will continue through another synchronized node. The only risk is the failure of the server on which it is running. In this case, you can use Horcrux.

Horcrux is an agent that is installed on an odd number of servers (from three, i.e., three, five, seven, and so on). When using it, the private key for validation is split into several parts (according to the number of nodes), and in order for the validator to continue signing blocks, two out of three servers must remain available. This means that if one agent fails, the validator will still be able to sign blocks.

Important. Agents are not relevant for networks with short inter-block intervals (for example, Sei) because they cause delays, due to which the validator simply does not have time to sign blocks. In addition, all these tools in the form of ready-made software are only available in the Cosmos ecosystem. They simply do not exist for other blockchains.

Features of launching nodes in the testnet

Beginner node operators can gain their first experience by launching nodes in the testnet. From a technical point of view, the differences are insignificant, but it is somewhat easier and involves fewer financial risks.

When launching test nodes, one should remember that the main goal of the testnet is to conduct trial network launches, check how operable it is in principle, and form an initial set of nodes. This determines the key differences between nodes in the mainnet and the testnet:

In addition, if the user is interested in the project and plans to support the deployed node in the long term, launching during the testnet stage will allow them to identify and work through issues related to the functioning of validators and other nodes in advance.

Active participation in the testnet also allows one to build a reputation and prove reliability as a node operator. After the transition to the mainnet, it is easier for early participants to get a validator spot in the main network, delegation from the team and the community, as well as other preferences.

Conclusion

Nodes are the foundation of any blockchain. Everyone knows this, but few understand how to launch their own nodes for verifying transactions, storing data, or accessing the blockchain. Meanwhile, deploying and maintaining your own node not only provides the user with experience of interacting with decentralized networks on a deep technical level but also opens new opportunities for earning and integrating into the community.

I have gathered in this article the basic theoretical and practical information about launching nodes. A bit of patience, basic console skills, and the ability to follow instructions will help you solve 90% of the problems.