Node Guide for NFTFRIENDSALPHA
A node in cryptocurrency is a computer connected to the blockchain network, running a specific program continuously. Nodes perform essential functions such as storing and verifying transactions. They form a decentralized network where each participant can validate data, ensuring the security and reliability of the entire system. Typically, nodes are hosted on servers rather than personal computers to enhance their uptime.
Why Nodes are Necessary
Nodes are interconnected (peers) to achieve consensus, a mechanism that prevents double-spending of cryptocurrency. Key points include:
- Communication with Other Nodes: Nodes exchange data with other network nodes to synchronize the blockchain's state.
- Consensus Mechanism: An algorithm that helps nodes agree on the validity of transactions and blocks. Examples include Proof of Work (PoW) and Proof of Stake (PoS).
- Preventing Double Spending: The consensus mechanism ensures the same cryptocurrency cannot be spent twice, which is crucial for maintaining system trust.
Imagine the blockchain as a massive ledger. Each transaction adds a new entry to this ledger. Nodes are copies of this ledger stored on different computers worldwide. When a transaction occurs, nodes verify and add it to their copies of the ledger, making the system transparent and fraud-resistant.
Proof of Work (PoW) and Proof of Stake (PoS)
Consensus is the process by which participants in a decentralized network agree on the current state of the blockchain, i.e., which transactions are valid and which blocks should be added.
- Miners: Network participants use powerful computers to solve complex mathematical problems.
- Task: These tasks require significant computational resources and energy. The goal is to find a solution meeting specific criteria.
- Solution: Once a miner finds a solution, it is shared with other network participants for verification.
- Confirmation: If the solution is correct, the miner can add a new transaction block to the blockchain and receive cryptocurrency as a reward (e.g., bitcoins).
Purpose: PoW secures the network since altering the blockchain would require enormous computational resources, making attacks costly and virtually impossible.
Example: Imagine a group wanting to add entries to a shared journal. To add an entry, each must solve a complex puzzle. The first to solve it adds the entry and receives a reward. The solution is verified by everyone else to ensure its correctness, preventing fraud since it would require solving many puzzles simultaneously.
Proof of Stake (PoS): Used in cryptocurrencies like Ethereum 2.0, Cosmos, Polygon, and Solana.
- Coin Holders: Participants, called validators, lock a certain amount of their coins in the network (staking).
- Validator Selection: The network randomly selects validators to create new blocks and verify transactions. The likelihood of selection depends on the amount of staked coins—the more coins, the higher the chance.
- Block Creation: The chosen validator creates a new transaction block and adds it to the blockchain.
- Reward: Validators earn rewards for their work in the form of new coins or transaction fees.
Purpose: PoS saves resources as it does not require powerful computers for complex tasks. It secures the network since an attacker would need to own a significant amount of coins to influence the network, making attacks costly and risky.
Example: Imagine a bank where clients can lock money in their accounts. The bank randomly selects a client to verify new transactions and add them to the journal. The more money a client has locked, the higher the chance of being selected. The client receives a reward for their work, ensuring the system is secure as no one risks their money for fraud.
Types of Nodes and Their Differences
Nodes perform various functions depending on their type and the cryptocurrency they support. Key types include:
- Full Nodes: Store the entire blockchain copy, verify, and confirm transactions and blocks, ensuring network decentralization and security. Example: Bitcoin Core.
- Light Nodes (SPV Nodes): Do not store the full blockchain. Instead, they download only block headers and rely on full nodes for transaction verification, making them more resource-efficient. Example: Avail or Celestia.
- Mining Nodes: Participate in mining by creating new blocks and adding them to the blockchain, solving complex mathematical problems to confirm transactions and earn rewards. Example: Iron Fish or Aleo.
- Validator Nodes: Used in PoS networks, they verify and confirm transactions and blocks by staking coins. Example: Ethereum 2.0, Cosmos, Binance Smart Chain.
Server Hosting for Nodes
While it is possible to run a node on a home computer, using cloud servers offers the advantage of 24/7 uptime, minimizing risks from hardware failures, power outages, or internet issues.
- VPS (Virtual Private Server): Shared server resources divided among multiple VPS instances, using OS-level virtualization.
- VDS (Virtual Dedicated Server): Provides better performance and stability with full isolation of resources using hypervisor-level virtualization.
- DS (Dedicated Server): An entire physical server dedicated to a single client, offering complete control over resources and configuration, suitable for running multiple nodes.
Hosting review
The choice of hosting directly affects the performance of the node and the quality level of your participation during network testing, and will also help to avoid problems when launching and maintaining a node on the mainnet. But all ratings are subjective, and subsequent divisions are no exception, but still the information was taken from authoritative circles in the field of nodes and validation.
- Hosters can be roughly divided into the following categories:
Top hostings, with which in 99% of cases there will be no problems, but the prices are appropriate. VULTR, Digital Ocean, OVH, Amazon AWS, Google Cloud Platform - these platforms provide high-quality and fast support, modern and powerful hardware. Some of them provide free use for a specific period. - Hetzner - in the field of nodes, this hoster should be placed in a separate category. According to most noders, this is the golden mean in terms of price/quality. Officially, the hoster’s rules state that installing cryptocurrency nodes is prohibited, but in fact, most testnets use Hetzner. It is strictly not recommended to run miners on it or regularly monitor that the server is not constantly overloaded.
- Average hosting companies where you can get a decent server for inexpensively, but you can also rent a server with already worn-out hard drives, which is very critical for the nodes of some projects. For example, for Cosmos projects, bad hard drives = skipping blocks, lagging behind the network, or unable to sync. As a rule, such hostings have a good pricing policy, and where a server on Hetzner would cost 20-25 dollars, here you can get it for 5-7 dollars. These include Xorek, aeza and VDSina.
Monitoring and Maintaining Nodes
To ensure continuous node operation, regular monitoring and maintenance are essential:
- Monitoring: Use tools like Prometheus and Grafana to track node performance.
- Updates: Regularly update node software to maintain network compatibility and security.
- Logs: Check node logs periodically for errors to identify and fix issues.
- Backups: Make regular backups of essential files for recovery in case of server migration or critical errors.
- Check the logs: errors in the logs may indicate a specific problem, if you are not sure how to fix the problem, then use the advice in the next paragraph.
- Reach out to the community: Often the cryptocurrency community can help with a problem by providing advice and guidance. First of all, we recommend contacting the author of the guide or the official Discord of the project; in most cases, projects create special channels for help with nodes.
- Restarting a node: Sometimes restarting a node can solve temporary problems. If even after a restart the error does not disappear, then you will have to look for the true cause of the problem.
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