Bitcoin is widely used for financial operations around the world. Despite being the oldest and having much fewer features than programmable blockchains, it’s very secure and reliable. The BTC price is the largest among all cryptocurrencies (and other currencies as well), and it has more than 50% of the crypto market share.
Here, we’ll overview the Bitcoin node structure, types, and their peculiarities, so our readers can understand how to deal with them.
What is a Bitcoin node
Nodes are computers powerful enough to store the blockchain’s transaction history, either full or partial, and proceed with its transactions. Each node has a blockchain client installed, which ensures interconnection between all of them, so all nodes are in constant synchronization. A consensus mechanism, encoded in the blockchain software, controls how the information can be recorded in the blockchain. While there are many consensus types, the general scheme can be seen below.
All changes made to the node are quickly reverted due to the sync with other nodes. Thus, no one can change the recorded information or modify the consensus without the consent from the majority of the blockchain node operators.
NB: We have a detailed node guide if you want to dive deeper into the topic!
After having a quick node definition, we now can focus on Bitcoin.
Bitcoin node meaning
So, what is a Bitcoin node? At first, it’s a computer with Bitcoin Core running on it, connected to other computers with this software. They’re synchronizing constantly, as new and new transactions are processed. They can be recorded to the blockchain only according to its consensus, which regulates how new blocks are created. No other recordings or changes can be made, as they’re instantly reverted.
Let’s now overview its consensus mechanism and node types.
What is a Bitcoin node vs miner
Bitcoin utilizes the Proof-of-Work (PoW) consensus mechanism, and its block creation and validation process is called mining. This process requires computing power, measured in the number of cryptographic functions (hashes) computing per time unit. The more hashes are solved, the higher the chance of the new block creation.
As each new block creation implies BTC rewards for the miner, there is a great motivation to mine Bitcoin and earn money, while contributing to the blockchain’s security. However, it requires very large computational resources in the form of GPU units.
Soon, we’ll dive deeper into this process, and now let’s see the Bitcoin node types and who operates them.
What does a Bitcoin node do
All Bitcoin nodes are connected to each other, and each of its node types serves a specific purpose.
- Full nodes maintain the blockchain integrity by storing all its transactions from the genesis block.
- Light nodes store only recent blocks, relying on the full nodes, but they’re generally faster and more lightweight.
- Miner nodes are full nodes that use their computational power to solve hashes and generate new Bitcoin blocks.
We’ll explore all these types in the next article’s section.
What is a Bitcoin node operator
Everyone who runs a Bitcoin node becomes a node operator. It includes:
- full node owners, who maintain the network integrity;
- miners, who contribute the computing power to the Bitcoin network;
As we’ll see in the next sections, running a full node requires large hardware investments and consumes a lot of time. Using a node provider may be much easier and more efficient, especially if you need a node for blockchain development or trading.
For mining, users need specific equipment, and a simple node doesn’t work here.
With all these prerequisites, let’s dive into the diversity of Bitcoin nodes to understand what a Bitcoin full node is and how it can be used.
Bitcoin node types
As mentioned, there are several types, designed for different purposes. Three primary types and their interconnections can be seen below.
NB: Dive deeper in our full-scale node type guide!
All Bitcoin node types will be described in detail. After that, we’ll overview a specific L2 solution, Lightning, which makes Bitcoin transactions much faster.
So, let’s dive deeper into what is a node in Bitcoin and explore each of its types.
Full Bitcoin node
As one can see on the scheme, full nodes are responsible for maintaining the network integrity. It contains the Bitcoin’s genesis block, created in its first day in 2009, and all the sequence of blocks after it up to the present moment. As new blocks are created and new transactions are recorded into it, they appear in the blockchain, and all full nodes are updated.
Nothing in them can be changed, as the node integrity is constantly checked during the synchronization, and all changes in nodes that violate the consensus are reverted. However, to optimize performance, full nodes can be pruned, which means dismissing some historical data without losing the overall network integrity.
If a full node isn’t pruned and contains the full blockchain history, it’s called the archival node, which is described below.
Archival node
A full node stores all relevant blockchain data, but as mentioned, sometimes it means discarding those that aren’t required for maintaining the network’s integrity.
If a full node contains the full blockchain history, without any exceptions, and neither of it can be removed during the node running, it’s called an archive node. It can be used to locate any block and transaction, track blockchain development, and synchronize all its elements in the network.
Such nodes are necessary when launching a crypto exchange or conducting research. They are the most space-consuming, as they need to store all the blockchain's data. The Bitcoin full size is about 600 GB as of October 2024, and it grows constantly.
Light node
For having the basic blockchain functionality, light nodes are usually enough. They contain only recent blocks, where new transactions are recorded, and rely on full nodes to maintain the blockchain integrity. They occupy much less disk space and computational resources, while operating much faster. Such savings are certainly beneficial for Bitcoin developers.
The drawback is obvious, too: their overreliance on the full nodes. Therefore, they’re much less autonomous and secure.
Mining node
Here we have the core of Bitcoin’s Proof-of-Work (PoW) consensus functionality: mining. So, what is a BTC node that ensures the network’s consensus, creates new blocks, and protects its integrity?
Mining nodes generate a hash that is needed to create new blocks, where new transactions will be stored. That’s how PoW works: it requires proof of the computational work, which ensures that the blockchain is indeed secured. Let’s see how these computations are made.
Bitcoin uses a hash function, a cryptography algorithm that turns all inputs into strings of a fixed size, where each input corresponds to a single string. The total computing power contributed to the Bitcoin integrity is measured in hashes per second, which means producing a certain number of cryptographic computations per time unit. Basically, it means solving cryptographic puzzles.
NB: You can read more about blockchain hashing here!
To counterfeit the network and steal funds, a malefactor must have a computational power equal to at least 51% of all hash currently produced by miners. With that, they will have the ability to modify the consensus. As one may guess, it’s hardly possible, as the total amount of hash is tremendous.
One can see the total Bitcoin hash rate changes below, and while it’s fluctuating, it’s more than 700,000,000,000,000,000,000 hashes per second today. It means more than 700 billion billion computations per second!
Image: blockchain.com
To compare, a typical high-productive GPU unit produces several billion hashes per second. A specialized device called ASIC (Application-Specific Integrated Circuit) produces more than a trillion (TH/s), up to 300–500 TH/s. But still, one can easily calculate an extremely large number of GPU devices needed to hack Bitcoin.
The trouble is that miner nodes require a tremendous amount of computational power, too, wasting a lot of energy.
Bitcoin is programmed in the way that the more hash is currently produced, the more is needed to produce a new block. Miners obtain BTC rewards for each block produced, and that’s the only way it can appear in circulation. That’s why the process was called “mining,” as it shares similarities with gold mining. It’s also the main motivation behind the process: it’s a real way to earn money due to very high BTC prices.
However, when a certain number of blocks is produced, the miner rewards decrease by half, which is called Bitcoin halving. The last halving was in April 2024, and with each, more and more hash is needed to produce a block and get BTC.
We’ll overview ASIC devices and the investments they need at the article’s end.
Meanwhile, one can explore Bitcoin methods to gather crucial information from the network. Let’s see an example of how to check the current mining difficulty using the getdifficulty method and GetBlock’s free access token.
curl --location --request POST 'https://go.getblock.io//' \ --header 'Content-Type: application/json' \ --data-raw '{"jsonrpc": "2.0", "method": "getdifficulty", "params": [], "id": "getblock.io"}' }
A response:
{
"jsonrpc": "2.0",
"result": 92049594548485.47,
"id": "getblock.io"
}
NB: To read more about Bitcoin methods, check our guide!
What is the Bitcoin Lightning node
With all its benefits, such as very high security, the main Bitcoin drawback is its poor bandwidth. Due to its internal structure, it can only proceed with about 7 transactions per second, while currently having about 10 million transactions per month.
Thus, network congestion is very high, leading to high transaction fees needed to proceed with them. It’s widely known as the Bitcoin scalability problem. Let’s see what is a node in Bitcoin that helps with that.
Lightning is an L2 network built on the Bitcoin mainnet to solve the problem. It opens a payment channel between two wallets, assigns a unique address to it, and enables near-instant payments. Fees are usually many times lower than those in the mainnet. The payment is recorded in the mainnet only after the receiver withdraws the funds, after which the channel is closed.
To make a payment using Lightning, both Bitcoin wallets must be multi-signature. One can see the process scheme below.
Image: Swytfx Learn
All these payment channels are supported by the Lightning node infrastructure, which is different from the original Bitcoin nodes. Lightning nodes are responsible for supporting the payment channels and maintaining the network integrity. No mining is present in this L2 network.
Each node sets its own transaction fee, which becomes an operator reward for running the node. The lower the fee, the more likely the node will be selected to proceed with the payment channel. In that way, Lightning node operators are incentivised to lower their fees to proceed with more transactions and, thus, earn more.
How to get a Bitcoin node
Let’s summarize what are Bitcoin node types that maintain the network integrity.
| Full node | Mining node | Archive node | Light node | Lightning node |
|---|---|---|---|---|
| Stores all essential blockchain data | A full node that uses GPU for realizing the PoW consensus. | Stores the whole transaction history | Stores only recent blocks | A node in the Bitcoin L2 solution to speed up its transactions. |
To start using a Bitcoin node, you need a computer with Linux, Windows, or macOS that follows all hardware requirements.
- Disk space: 350 GB or more, 600 GB for the full archive node.
- Internet connection: 1 Mbit/s is recommended.
- RAM: 2–4 GB.
After preparing the necessary hardware, you need to follow these steps, while specific actions can be found on the Bitcoin Foundation’s official website.
- Download and install the Bitcoin Core from the official website.
- Launch Bitcoin Core and configure it, such as setting the node pruning.
- Set up the machine’s ports, so other nodes can connect to yours.
- Monitor as Bitcoin Code downloads and syncs the blockchain data.
- Keep the software updated and ensure everything runs smoothly.
For Bitcoin mining, as mentioned, specific devices called ASIC are needed. Let’s overview what is Bitcoin full node running and how it can be realized in different forms. Then, we’ll wrap the article up by overviewing the mining process, the ASICs, opportunities, and potential risks.
What is running a Bitcoin node
For full network participation, a user needs to have a full node, with a Bitcoin Core running on it.
Why run Bitcoin node
There are several reasons why one may want to run a Bitcoin node: from supporting the network to earning on Bitcoin mining.
Why run Bitcoin full node
Running a Bitcoin node can be both profitable and valuable for the community. By participating in maintaining the network’s integrity, one makes Bitcoin payments safer and more efficient. In addition, an operator has direct access to network transactions, so they’ll be much quicker and cheaper. Moreover, full nodes are the basis of Bitcoin mining, although it requires powerful GPU units as an essential prerequisite.
When talking about the Bitcoin Lightning infrastructure, the situation is different. Running the Lightning node means making Bitcoin payments cheaper and, therefore, is highly valuable. Let’s see whether it can offer material benefits for its users.
Each time the node creates the payment gate, it earns BTC for its user. The amount is low, however, and to increase the earning chance, the price must be set as low as possible during the node setup.
According to the Lightning node operators, it isn’t very profitable, especially regarding the investments it needs for setting up. Still, it gives permanent access to low-cost payments, which is the primary benefit of running this node.
How to make money running a Bitcoin node
When talking about the reason why to have a Bitcoin node, for many is an opportunity to earn the precious BTC. It can be earned as a reward for mining, and while potential earnings are indeed high, mining requires large initial investments. As mentioned, Application-Specific Integrated Circuits (ASICs) are required to produce a reasonable amount of hash.
A typical ASIC is depicted below. It contains a set of GPU units, with a robust cooling system.
Such a device can produce much more hash than a typical high-performing GPU unit: up to several trillion hashes per second (TH/s). It’s much more reasonable than trying to use your computer’s GPU. You can use hash calculators, widely available online, to calculate the approximate amount of BTC that can be earned with your current hash rate. As of October 2024, 300 TH/s roughly translates to 0.0002 BTC/day.
There are two potential problems. First, the earnings will inevitably decrease with subsequent Bitcoin halvings, and the later you start mining, the less you’ll be able to earn. Second, the BTC price, while generally high, is very unstable. No one can predict how large it will be in the future, and while most crypto analytics predict growth, it can fall as well.
GetBlock emphasizes that engaging with mining for earning is risky, and encourages you to conduct your own research before that.
How much does it cost to run a Bitcoin node
Let’s now wrap the article up with the cost required for launching a full node and estimate how much a good ASIC can cost.
Now, we understand what a Bitcoin full node is and can see how much is needed to run it. It’s just a robust computer with enough disk space, RAM, and Internet bandwidth. Let’s focus on the mining equipment prices you need to earn a desirable amount of BTC.
When we’re talking about mining nodes, money investments are expected to be much larger, as ASICs are quite expensive. They form a highly specialized market niche, with its own online and physical shops. As of October 2024, ASICs with a hash rate of 200 TH/s cost about $3,000–$4,000, depending on the manufacturers, energy efficiency, and so on.
Let’s see several popular examples in the table below, according to user reviews, with estimated hash rates, power consumptions, and approximate prices.
| Canaan Avalon Nano 3 | MicroBT Whatsminer M60S | Bitmain Antminer S21+ | Bitmain Antminer S21e XP Hydro 3U |
|---|---|---|---|
| 4 TH/s | 186 TH/s | 216 TH/s | 860 TH/s |
| 140 W | 3441 W | 3564 W | 11180 W |
| $450 | $3,950 | $3,500 | $19,000 |
Based on these numbers, you can calculate the expected profitability, assuming that the BTC price will fluctuate around the current rates.
Therefore, there are different types of Bitcoin nodes. Full nodes form its backbone, light nodes enable faster and easier connection, while mining nodes produce new blocks by solving hash functions. Its L2, Bitcoin Lightning, uses direct payment gates on top of the mainnet, ensuring quicker and cheaper transactions.
Due to its PoW consensus, Bitcoin is very secure, but energy-inefficient. Its simplicity, robust security, widespread popularity, and market dominance ensure its strong position and its subsequent development may solve its scalability and energy efficiency problems.
