Today, we'll see which node holds the current state of the blockchain and can therefore validate new transactions.
The blockchain system relies on full nodes, keeping the whole block history. Therefore, smaller light nodes can operate just by keeping the latest translations, relying on full nodes. However, to validate the blockchain and create new blocks, specific validator nodes are needed, based on full nodes. Different types of them exist, according to the network’s type and consensus mechanism.
Let’s look closer.
Full nodes in blockchain
Full nodes contain the total information about the network’s current state and historical blockchain data, along with the software necessary to maintain the system's integrity. They are in constant sync and update regularly after each new block’s creation. With that, they serve as the blockchain’s backbone, making it almost impossible to hack into it and counterfeit it.
Running a full node can be very hardware-demanding. For example, an Ethereum full node requires at least 16 GB of RAM, 1 TB of free SSD hard drive space, a fast CPU with 4 cores, and a 25 MBit/s Internet connection. Requirements for Polygon and Solana full nodes are even higher. The reason is that they hold the full-size blockchain transaction record, which grows each minute. They must sync it with the whole network constantly, requiring great memory and computational capacities.
For validating the blockchain’s state, the full node must be upgraded in a specific way. An ordinary full node can sync with others, ensuring stable blockchain functioning, but participation in new block creation requires specific software, unique for each network. It can also require staking some amount of the chain’s native token, running large computational facilities, or being chosen as a validator.
Let’s look closer at these peculiarities, starting with the network consensus types.
How to validate transactions in blockchain?
Different consensus mechanisms solve validation problems differently. Here, we’ll overview three of them, which are the most used.
The Proof-of-Work (PoW) mechanism requires cryptographic computational activities to be done in order to create new blocks. The more network computational activity the node performs compared to the rest of the network, the larger its rewards. That’s what is called mining.
The most common approach today is Proof-of-Stake (PoS) which implements staking as a way to validate the chain’s value and provide liquidity for its token. By staking some amount of tokens, nodes ensure that the consensus will be followed, meaning that all transactions and smart contracts proceed as expected. These nodes obtain rewards in the native cryptocurrency, while malicious validators who try to manipulate transactions are penalized.
Want to know more about blockchain node types? Check our guide!
In both cases, the point is to show the network integrity proofs, either by solving cryptographic puzzles or using the staked cryptocurrency collateral. The third approach is called Proof-of-Authority (PoA) and implies validator selection based on their reputation. They are called authority nodes, which are mostly used for private networks.
For public ones, the PoS approach is highly energy-efficient and flexible, enabling numerous specific applications. That’s why it’s widely used today, although the highest valued coin, Bitcoin, still operates on the blockchain that utilizes PoW.
Validation in different consensus mechanisms
So, how does the validation proceed? As mentioned, it must include a full node, the one that keeps the whole blockchain’s history, its latest version of its software, and is regularly updated. It also must run specific software required for checking and validating transactions, which is often different for different chains. Therefore, the chain validation requires:
- Running a full node on hardware that meets all requirements.
- Deploying specific software from the blockchain to perform validation.
- Following the network’s consensus practices to be chosen as a validator.
Being a validator poses responsibility, but also offers rewards.
As typical PoS examples, Polygon uses Bor and Heimdall nodes for this purpose, while Ethereum mainnet validators are known as consensus clients. In both cases, they validate the network state based on the amount of the cryptocurrency staked, creating new blocks with transaction records and giving crypto rewards for stakers while penalizing any attempt to manipulate the network.
The situation is different in other consensus types. The PoW mechanism, used by Bitcoin and initially by Ethereum, implies heavy computations that should be solved to create each new block where transactions will be recorded, while performers obtain their rewards. Therefore, mining nodes, which are block producers here, cannot be run on ordinary computers and use specific GPU-based devices called ASICs. Only miners who have access to large computational facilities get decent rewards. It ensures high security but leads to high energy waste and, often, centralization.
In the Proof-of-Authority (PoA) approach, validators are appointed based on their reputation in the network, which is specifically defined for each network. It enables more efficient decision-making but leads to centralization and is rarely used in public chains. Still, BNB Smart Chain (BSC) uses the combined PoS and PoA mechanism, where the number of stakers is limited and the chance of being chosen depends on the user’s reputation and the amount of BNB staked. That’s how the network attempts to make transactions faster and cheaper without sacrificing decentralization too much.
Closing thoughts
Different blockchain validation approaches exist, depending on the consensus mechanism and the network peculiarities. All of them are performed by full nodes, which must be upgraded in a specific way. See the quick summary in the table below.
| Proof-of-Work (PoW) | Proof-of-Stake (PoS) | Proof-of-Authority (PoA) |
|---|---|---|
| Uses cryptography puzzle-solving for validation. | Uses staked token collateral for network validation. | Uses reputation to determine validators and their authority. |
| Decisions are made by miners with the highest computational power | Decisions are made by validators based on the consensus specifics. | Decisions are made by selected validators based on the authority. |
| Very energy-consuming due to the computational power requirements. | Energy-efficient, as it doesn’t require additional computations for validation. | Very energy-efficient and fast, as all validators are selected based on consensus specifics. |
| Very secure but quite centralized due to mining power concentration. | Secure and decentralized, as everyone can participate in staking. | Very centralized, as selected validators have the whole voting power in the network |
All these approaches hold a similar goal: to validate transactions in the network, generating new blocks where they are recorded and synchronizing them with the rest of the network. Full nodes that perform the validation according to the protocol are rewarded by the protocol’s native crypto, be it mining or staking rewards. While each approach has its own benefits and problems, the PoS approach is generally considered the most balanced.
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