The Uniswap community has approved the governance proposal that sought deployment of Uniswap v3 contracts over the Polygon PoS Chain. The approval comes in the form of an on-chain vote that saw the participation of over 72.6 million users from the community.
Uniswap Labs announced to deploy Uniswap v3 contracts based on the votes that reflected over 99.3% approval consensus and will be supported by a $20 million fund — $15 million for long-term liquidity mining campaign and $5 million for the overall adoption of Uniswap on Polygon (MATIC).
The Uniswap community has voted to deploy v3 on @0xPolygon through the governance process.
⚡️ Uniswap Labs will deploy Uniswap v3 contracts within a few days.
Stay tuned. pic.twitter.com/LwVLwEngPl
— Uniswap Labs (@Uniswap) December 18, 2021
In addition, Bjelic also announced it was the right moment for Uniswap to deploy on Polygon citing their position as “the second strongest DeFi ecosystem, right after Ethereum L1.” The entrepreneur also shared his willingness to incentivize Uniswap adoption, both financially and technologically.
The proposal was published by Polygon CEO Mihailo Bjelic on Nov. 20 and was open for voting until Dec. 18, arguing that “deploying to Polygon PoS can bring a lot of benefits” such as user base growth, huge savings for users, higher user activity, higher revenue, market capture and return to the original DeFi vision.
Source: Uniswap
Prior to on-chain voting for the governance proposal UP010, Bjelic released a set of consensus and temperature checks to identify the community sentiment behind the deployment of Uniswap v3:
“The consensus check 17 passed with 44M (98.87%) YES votes and 500k (1.13%) NO votes. The temperature check 7 passed with 7.79M (~100%) YES votes and 101 (~0%) NO votes.”
Related:Reddit co-founder and Polygon launch $200M Web 3.0 social media initiative
As Polygon strives to maintain a competitive position against the Ethereum ecosystem, the community announced a $200 million initiative with Seven Seven Six, a venture capital firm owned by Reddit co-founder Alexis Ohanian.
As Cointelegraph reported, the initiative will focus on supporting and hosting gaming applications and social media platforms built on Polygon’s infrastructure. Polygon explosive growth this year was supported by the launch of over 3,000 decentralized on-chain applications and other protocol launches and cross-chain migrations.
The United States military continues to explore blockchain technology to improve its processes. The U.S. Navy has signed a $1.5 million contract with Consensus Networks to develop a blockchain-enabled logistics system named HealthNet back in May. The project, built on IoT-focused blockchain IoTeX, is halfway complete, counting the days for its pilot scheduled for early 2022.
According to the information shared with Cointelegraph, Consensus Networks aims to provide real-time monitoring and logistics for nearly 700,000 sailors and marines via the HealthNet platform. The developer picked the IoTex blockchain to meet the security and scalability requirements of the Navy.
Nathan Miller, the CEO and founder of Consensus Networks, said that the project is 50% complete, and the U.S. Navy is pleased with the progress so far. He added that the Navy would “participate along with other partners who are interested in the blockchain-powered HealthNet.”
Pilot programs to improve the outdated and inefficient systems include medical logistics, the demand for pharmaceuticals, prediction of blood product demand, and supply of prostheses and medical equipment.
Miller predicted that the medical industry is poised to renew its systems with blockchain-based solutions, adding:
“It is hard to believe that today automobile manufacturers, such as Ford, have a better network for ensuring the health of their vehicles in the shop or on the road than the medical sector has to monitor and safeguard the health of people.”
HealthNet is not a Navy-exclusive project, Miller underscored. It would help medical operators utilize an integrated data environment and an interface to track medical suppliers from manufacturer to patient in order to reduce delivery time and waste.
Related:IoTeX ‘MachineFi’ rebrand backs 200%+ rally to a new all-time high
“For example, it will be great for elderly homes by helping them with better care without driving or being driven to a healthcare facility,” Miller explained. “The system will help track their health and predict their needs and get them sorted, so they do not have to visit clinics.”
The U.S. military has previously experimented with blockchain technology. The. Air Force was one of the first branches to make a contract with a blockchain startup. The U.S. Navy then granted Simba Chain $10 million to develop a secure messaging platform. Simba received another $1.5 million in 2021 to create a blockchain-based solution to enable demand sensing for critical military weaponry parts.
Supply chain tracking network VeChain has just upgraded its consensus mechanism to what it claims is the “world’s greenest” method of verifying blocks on the chain.
On Nov. 16, VeChain reached a milestone in its six-year history by upgrading its VeChainThor mainnet to the first phase of the Proof of Authority (PoA) 2.0 SURFACE consensus algorithm.
VeChain is a supply chain tracking system that launched in 2015 and combines physical tracking with blockchain record keeping.
PoA and Proof of Stake (PoS) differ from Proof of Work (PoW) in that they do not require mining to reach network consensus. PoA achieves consensus by verifying users’ identities, while PoS does this by staking coins in the network.
The VeChain network runs with only 101 nodes. Fewer nodes reduce decentralization but increase the speed and reliability of the network. This tends to be favored for commercial and industrial applications. By comparison, Bitcoin currently has 13,244 nodes, while Ethereum has 2,701.
An added advantage is PoA is less energy intensive and emits a very low amount of carbon. VeChain suggested that the new upgrade is the “world’s greenest consensus to drive mass adoption.”
The upgrade consists of three major components according to the official announcement. The first is a verifiable randomness function (VRF) which securely and randomly assigns nodes to produce blocks or process transactions, making them immune to corruption.
The second is a committee-endorsed block-producing process which significantly reduces the probability of network forking. Forking can cause delays and slow the throughput of the network.
The third component is a passive block finality confirmation process. This helps ensure new blocks are finalized even if all nodes on the network are not in sync.
The PoA 2.0 SURFACE upgrade also aims to improve scalability, security, and throughput on the VeChainThor mainnet.
The VeChain team explained in the announcement that the PoA 2.0 Secure Use-case adaptive Relatively Fork-free Approach of Chain Extension (SURFACE) is needed “to meet the demands of future blockchain applications and increasing global demand.”
Related:VeChain Thor mainnet reaches 10 million blocks milestone with no downtime
Various exchanges, including Binance and Crypto.com, supported the hard fork of VeChain (VET), which has fallen around 10% over the past 24 hours.
Finally we’ve made it! #10653500https://t.co/mXgVKjqGta
Thank you all for your continuous efforts! @PeterZh47977516 @cola_tin @liboliqi @abyteahead @MogLu2017 @AsbertMa @xjwx89 @vechaindev
We also need to say thanks to our dearest #VeFam.
Let’s enjoy this moment together! https://t.co/A6zMcsREbJ
— VeChain Foundation (@vechainofficial) November 16, 2021
The VeChain project also announced on Nov. 16 the election of the second steering committee (SC). The SC is designed to “facilitate the efficiency of decision-making and ensures the fairness and effectiveness of execution for all fundamental matters.”
Real-world use cases are one of the main adoption drivers for every crypto ecosystem, which also holds true for the Bitcoin (BTC) network. In the next seven days, the Bitcoin protocol will undergo a soft fork in the name of Taproot upgrade, which aims to improve the network’s privacy, efficiency and smart contracts capability.
Taproot is Bitcoin’s first major upgrade since August 2017, which saw the introduction of Segregated Witness (SegWit) and resulted in the launch of Lightning Network. While the previous fork primarily sought to fix transaction malleability and improve Bitcoin’s network scalability, the Taproot upgrade aims to revamp transaction efficiency, privacy and support smart contracts initiatives.
The Taproot upgrade was set for deployment after achieving a 90% consensus among the Bitcoin miners (mining nodes). On the same day in June 2021, Bitcoin developer Hampus Sjöberg tweeted the announcement:
WE HAVE LOCK IN! #Bitcoin #Taproot
Video by: @TheGuySwann!https://t.co/rCUp5VNCBX pic.twitter.com/YFLMTenWW0
— Hampus Sjöberg ⚡ (@hampus_s) June 12, 2021
The Taproot soft fork will see the introduction of Merkelized Abstract Syntax Tree (MAST), which introduces a condition that allows the sender and receiver to sign off on a settlement transaction together.
In addition, Taproot will also implement Schnorr Signature, an algorithm that will allow users to aggregate multiple signatures into one for a single transaction, reducing the inherent visible difference between regular and multisig transactions.
Schnorr’s signature scheme can also be used to modify the user’s private and public keys, in a manner that can be verifiable to confirm the legitimacy of each transaction. According to the original Taproot proposal from January 2018 put forth by Gregory Maxwell:
“I believe this construction will allow the largest possible anonymity set for fixed party smart contracts by making them look like the simplest possible payments. It accomplishes this without any overhead in the common case, invoking any sketchy or impractical techniques, requiring extra rounds of interaction between contract participants, and without requiring the durable storage of other data.”
At the time of writing, Taproot.Watch, a website built by Sjöberg, shows that the Taproot upgrade will be activated on Nov. 14th after the successfully minting 1020 blocks.
Related:Bitcoin network tags record high for daily settlement volume
Just last month, the Bitcoin network’s daily settlement value hit an all-time high after settling $31 billion worth of on-chain transactions.
Compared to the beginning of 2020, the network’s daily settlement volume has seen an increase of 40 times, supported by Bitcoin’s mainstream adoption in El Salvador and other jurisdictions.
There was $31 billion of value settled on the bitcoin network in a single day last week.
This is an all-time high for a single day of settlement value.
The global, decentralized payment system continues to become more dominant. (h/t @kerooke) pic.twitter.com/a6Q2FbPY3C
— Pomp (@APompliano) October 10, 2021
“[The Bitcoin network is] presently doing ~$190k per second. Compare this to $130k per second by Visa for US customers and $55k per second for Mastercard,” according to On-chain analyst Willy Woo.
The consensus mechanism used by Bitcoin is the only way to ensure true lasting freedom.
Delegated proof-of-take (DPoS) is a fundamentally different consensus protocol from proof-of-ork (PoW). The difference between the two presents itself in the kind of freedom they promote; while DPoS is freedom under a benign master, PoW is freedom from domination.
What Is Freedom?
Freedom can be understood in negative or positive terms, thanks to Isaiah Berlin. Negative freedom, according to Berlin, is the absence of interference or constraints. Positive freedom, by contrast, is having the capacity to do something to realize one’s potential. Negative freedom is also known as liberal freedom. According to the classical political philosophers that Berlin followed (Hobbes, for instance), one can enjoy freedom only when free from interference. It does not matter if there is a master who can arbitrarily interfere. If there are multiple doors to choose from and gatekeepers at each door, liberals argue that freedom means choosing and going through a door without interference. Keep this analogy in mind.
I’ve argued elsewhere that bitcoin freedom comprises both negative and positive freedom. Quentin Skinner defines this new conception of freedom as neo-Roman, and Phillip Pettit coins the term republican freedom as non-domination. With a minuscule difference, they both argue the same idea of freedom. Freedom as non-domination is negative because it promises freedom from domination (arbitrary interference) and positive freedom because it promotes practices to realize its potential. However, the most distinct aspect of freedom as non-domination is the ability to control power. Following the door analogy above, there can be gatekeepers, but citizens must control their behavior to practice their freedom of choosing and going through a door. Merely an absence of interference does not mean we are free because an arbitrary decision of a gatekeeper might take our freedom away. Being vigilant to check and control gatekeepers’ power is critical in freedom as non-domination.
Why PoW Is Essential For Freedom As Non-Domination
Freedom and decentralization are indispensable from each other because freedom can be possible only under decentralized power. Power needs to be broken up to secure liberty. A similar argument by Montesquieu in 1748 established one of the most critical pillars of democratic government: separation of power (see my short essay). For citizens to be free, branches of the government have to be separated so that they check and balance each other. Bitcoin, in this respect, promotes freedom as non-domination through its PoW consensus mechanism because a vast number of independent nodes to validate transactions and create new blocks is critical in dispersing the power for blockchain. If this power is concentrated in a few nodes, then the chances of arbitrary action of a blockchain would be easier, hence risks the freedom it promotes.
DPoS: Freedom Under A Benign Master
Delegated proof-of-stake is a consensus protocol that disperses the power to validate transactions and create new blocks to a few nodes. In a DPoS protocol, a few nodes take turns to produce blocks and validate transactions. In other words, the freedom of DPoS users is controlled by a few node operators. Although one could argue that those nodes are alternating between doing the work and are not functioning in a centralized fashion, thousands of Bitcoin nodes disseminated worldwide are absolutely more decentralized and secure. As discussed above, the more decentralized, the more security for freedom can be promoted.
Can we be free under a benign master? No! Freedom is not freedom unless there is some guarantee for maintaining that freedom for tomorrow. The master(s) of the blockchain run on the DPoS consensus mechanism can be good and benign today. They can “give” freedom to the users. Yet, the checks and balances to the power of the masters are much less vigorous than in Bitcoin. The freedom that is given can be taken away. For this reason, a mere possibility of interference creates domination. Bitcoin freedom, on the other hand, is freedom from domination. There are no “benevolent” gatekeepers who can change their minds in the future on a whim. The difference, in a nutshell, is between a benign master who gives freedom and an empowered citizenry of nodes that takes it.
This is a guest post by Burak Tumaç. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The Taproot upgrade has achieved the first significant milestone on the road to activation as 90% of the Bitcoin (BTC) mining hash rate signaled for the protocol improvement within the current difficulty epoch.
Data from Taproot.watch, a webpage created by Bitcoin developer Hampus Sjöberg, shows the lock-in stage is now completed.
All recognized mining pools signaled for the upgrade with Slush Pool being the first to do so. It is perhaps fitting that Slush Pool also mined block 687285 that sealed the Taproot lock-in.
TAPROOT LOCKED IN AT BLOCK 687285 BY SLUSHPOOL pic.twitter.com/FFDdibtmGt
— pourteaux (@pourteaux) June 12, 2021
AntPool and F2Pool — the top two Bitcoin mining pools by hash rate share — were also among one of the earliest supporters of the Taproot activation in the BTC mining arena
In a conversation with Cointelegraph Bitcoin core developer Pieter Wuille explained the activation step for Taproot, stating: “According to BIP341, once locked in, activation is automatic at block height 709632 – expected around November 14, 2021.”
Wuille also commented on the significance of Taproot, adding:
“It’s the first consensus change since Segwit activated in august 2017. It extends Bitcoin’s script capabilities in ways that make certain things cheaper (especially more complex applications like multisig and layer 2 things), and somewhat more private by often hiding what the exact spending rules were.”
According to Wuille, the activation in November is only the beginning as the real work will be building the software to leverage the benefits of the protocol improvement.
June 12’s historic significance for Bitcoin has also moved beyond Taproot as the day seen a record number of transactions mined in a single block. Data from blockchain explorer Blockchair shows 4,075 transactions in block height 687249.
Source: Blockchair.com
This record figure is almost twice the average transactions per block recorded on June 11 and is four times the typical transaction count for Bitcoin blocks.
With hash rate declining amid mining restrictions in China, Saturday’s transaction count average might be due to a slowdown in block production forcing more transactions to be included in a single block.
At a conference yesterday, Ethereum co-founder and unofficial figurehead Vitalik Buterin argued that Ethereum’s upcoming transition to a proof-of-stake consensus mechanism is a “solution” to the blockchain’s rampant energy consumption that has been incensing critics as of late.
In an interview at the StartmeupHK virtual conference hosted from Hong Kong, Buterin said that while proof of stake is “still in its infancy and less battle-tested” than Ethereum’s current proof-of-work model, it can ultimately reduce the chain’s energy consumption by upwards of 10,000x.
The comments come amid a period of rampant criticism of blockchain technology for its ecological impact — including from some erstwhile supporters. Tesla founder Elon Musk recently undertook an about-face in regards to the car company accepting Bitcoin payments, saying that he could not encourage the use of fossil fuels via Bitcoin mining. In other threads, he also called for Dogecoin to increase its efficiency across several key metrics.
Buterin directly responded to these comments about scalability in a blog post on his website, laying out the problems with trying to scale by simply tweaking the parameters around blocksize.
The limits to blockchain scalability (or, why you can’t “just increase the block size by 10x”):https://t.co/y08T3TMr2U
— vitalik.eth (@VitalikButerin) May 23, 2021
Earlier in the month, Buterin also argued that Bitcoin’s continued use of proof-of-work means that the chain, which is currently the world’s largest, will eventually get “left behind” as users increasingly demand more energy-efficient and environmentally friendly options — a phenomenon he says makes it “possible” that Ethereum eventually eclipses Bitcoin and the largest digital asset.
Ultimately, Buterin seems to agree with critics regarding the need for blockchains to adopt newer, more efficient models — especially as the chain grows in volume and becomes a widely relied-upon computational network.
“This thing we’re building isn’t just a game anymore. It’s a significant part of a new era.”
Republican Representative Tom Emmer has called for more precise tax guidelines regarding cryptocurrency earnings, after a report he commissioned from the Law Library of Congress showed a stark disparity between regulatory approaches taken by various tax authorities around the world.
The 128-page study examined cryptocurrency tax laws in 31 nations, paying particular interest to their application concerning coins and tokens earned through mining and staking. As the report notes, many countries have already established specific rules for coins earned through mining, but only five have laid down any guidance for would-be stakers.
Of the 31 jurisdictions included in the study, only Australia, Switzerland, Finland, New Zealand and Norway were found to have addressed tax rules in regard to staking.
Proof-of-stake (PoS) is a consensus mechanism used by many blockchains as an alternative to the more energy-intensive proof-of-work pioneered by Bitcoin (BTC). The process is analogous to crypto mining, but instead of trying to amass the most computing power, PoS sees people “stake” their coins on the blockchain in return for a proportional share of the block rewards.
The report also detailed tax guidance surrounding coins gained through airdrops and hardforks, where tokens are either given away for free, or created as the result of the birth of a new blockchain. Only six countries mention airdrops or hardforks in their national tax guidelines: Finland, Japan, New Zealand, Australia, Singapore, and the United Kingdom.
Emmer said clearer guidance was needed from the Internal Revenue Service to avoid stifling technological innovation in the United States:
“In order for these technologies to thrive and reach their revolutionary potential, we must have the knowledge and organizational landscape of the approaches to regulation to best implement the proper path forward that will not stifle this innovation. We can improve the clarity of IRS taxation while at the same time ensuring these taxes are sensibly applied.”
Abraham Sutherland, legal advisor to the Proof-of-Stake Alliance, said a logical first step was to tax the sale of tokens gained through staking, not their initial acquisition.
“The critical first step is to clearly establish that block rewards are taxed when the new tokens are sold, like all other new property, and not when they are first acquired. This will both reduce administrative headaches and ensure that people are not overtaxed,” Sutherland said.
A Bitcoin node is a piece of software that enforces the network’s consensus rules by verifying new transactions sent by users and blocks added by miners.
Running self-owned nodes can protect users’ privacy and prevents them from accepting fraudulent fork coins.
All miners are Bitcoin nodes, but not all nodes are Bitcoin miners.
A user can either run a full node, light-node, or pruned node based on their usage.
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Bitcoin’s peer-to-peer strength lies in its vast network of nodes. The famous saying in crypto, “not your private keys, not your coins,” extends to crypto nodes as, “Not your node, not your rules.”
Bitcoin full nodes protect user privacy and strengthen the network’s distributed consensus. And just recently, the networkhitan all-time high for active nodes, making the network all the more robust.
Running a node in crypto is analogous to having eyes in the fiat world. Without eyes, you rely on others to verify a bill you received is not counterfeit. Without a node, you rely on others to verify your coins and protect their immutability. Why would you give up your eyes?! 🤔
— Charlie Lee [LTC⚡] (@SatoshiLite) October 15, 2018
Setting one up is not only easy but incredibly important for the sustained health of the Bitcoin network. Moreover, the lightning network (LN) provides a way to incentivize Bitcoin node operators and channel liquidity providers (LPs).
In this guide, Crypto Briefing walks readers through why they should set up a Bitcoin node and how to do it on various devices.
What Is a Bitcoin Node?
A Bitcoin node is a program that validates transactions and blocks. There are different types of nodes ranging from a full node, a light node, and pruned full nodes. There are technical differences between each class, but Bitcoin nodes, no matter the format, assist in enforcing the network’s consensus rules.
Consensus rules are the set of conditions coded into the network.
A Bitcoin node enforces these rules by verifying the private address and balance when sending a BTC payment.
A full node is connected to a network of other nodes that form the distributed consensus network.
A node does not have to trust other nodes for verifying payments. It validates them itself before broadcasting across the network.
Bitcoin nodes’ network quickly disregards a node that tries to propagate incorrect information by banning it for at least 24 hours or even longer, depending on the number of incorrect propagations.
Bitcoin Wallets and Nodes
A Bitcoin wallet or address is a set of two numbers—a public key and a private key—encrypted together.
Bitcoin users send transactions using this pair of numbers, which constitute a wallet.
The wallet interacts with a Bitcoin node, which verifies and broadcasts the transaction across the network.
These wallets can be connected to online servers and nodes supported by the wallet or a user’s self-hosted node. A user can choose any of the following:
Exchange Wallet: A third-party wallet where the wallet’s private key is often hidden from the user or shared with a third-party app. These wallets are vulnerable to security risks and exchange hacks, which have happened numerous times in Bitcoin’s history.
Simplified Payment Verification (SPV) Wallets: These are software wallets that interact with full nodes via blockchain headers. The SPV wallet can confirm the addition of the transaction in a block using these block headers. Examples include Electrum, Blockstream’s Green Wallet, and several others.
Self-Owned Nodes: Miners, businesses, and privacy-conscious users rely on self-owned full nodes, which connect directly to the blockchain without any third-party intermediary. Hence, ensuring the privacy and security of Bitcoin addresses.
If a transaction is invalid—wrong address, insufficient balance, or otherwise—then the node ignores the transaction.
Difference Between Full Node and Miner
Validators or nodes in the Bitcoin money network solve three primary issues: confirming the authenticity of a transaction, protecting the privacy of individuals, and avoiding double spends.
In the originalBitcoin Whitepaper, mining nodes were inseparable from full nodes. Satoshi Nakamoto wrote:
“The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”
Due to stiff competition and growth of specialized mining machines, miners have become “specialized nodes,” which perform additional work beyond merely verifying the transactions.
All miners are Bitcoin nodes, but not all nodes are Bitcoin miners.
The miners work to solve the energy-intensive Proof of Work (PoW) problem to add blocks to the main blockchain. The mining software receives transactions from nodes, order them in a linear data set (a block), and finally, compete against other miners to add their block to the blockchain.
Double spend refers to when an address spends more Bitcoin than it holds by duplicating the tokens or sending transactions simultaneously. For instance, person A with one BTC sends two transactions of one BTC each to Person B and Person C.
Satoshi Nakamoto solved this issue by designing the network as a “timestamp server.”
The mining nodes order the transaction in a time-based data stack, constituting a block. Hence, as soon as the first transaction gets registered to a block, let’s say that A to B of one BTC is sent and recorded; then the second, insufficient transaction will be rejected.
When miners successfully add a block to the network, a full node independently and authoritatively verifies all the transactions in that block. Thus, if the miner adds an invalid transaction to the block, the nodes will reject that block.
A transaction receives its first confirmation only when the block containing the transaction gets ratified by a full node.
The number of confirmations of a transaction is a metric obtained by subtracting the block number that stores the payment from thecurrent block height.
Moreover, one does not have to be a node if they’re doing proof-of-work (PoW) for a mining pool. In this case, the mining pool adds the block based on consensus rules for them.
In sum, miners are responsible for storing the transactions into a block, whereas nodes determine if transactions and blocks follow the consensus rules.
Privacy Protections
All information on Bitcoin is publicly logged, including the balance and a history of all transfers ever made using all addresses. A public record of credits makes a Bitcoin user vulnerable to a privacy breach, as an address can effectively tag individuals.
The fully validating Bitcoin node, on the other hand, receives and transmits data without any distinction, making it is not easy to ascertain the IP address of the incoming node.
Moreover, a fully validating user may want to consider hiding their IP address by implementing the Tor network. While there are only about 11,500 visible full nodes, experts have said that, in reality, many are operating behind the closed curtains of the Tor network.
Running a Bitcoin node also protects users from spending their coins on a forked network, as their node continues to abide by the rules of the unforked blockchain.
For instance, since Bitcoin Cash is a fork of Bitcoin, they share the same address. Hence, if a wallet does not support Bitcoin Cash or vice-versa,sending transactions to the wrong walletsmay lead to loss of funds, especially if sent to an exchange or third-party wallet without a private key back up.
In the worst case, dubious apps and hackers may lead an informed user to believe that they are receiving Bitcoin when it might actually be a forked coin.
How to Set up a Bitcoin Node
A Bitcoin full node is a server that stores all the transactions ever made on the blockchain. The full node verifies the balance on a wallet using this history and validates transactions according to consensus rules.
Thus, owning a Bitcoin full node requires memory space. The size of the Bitcoin blockchain increases linearly in time; currently, it is around 320 GB.
The size of the Bitcoin blockchain. Source:Blockchain.com
Currently, the average BTC block size is 1.3 MB. The entire node space increases by a little more than one GB in a week at less than ten minutes per block.
Owners may choose the older version of HDD hard drives or the newer solid-state drives (SSD). The downloading and verification is faster on an SSD versus HDD.
The other requirements for running a full node are:
A hardware device with an operating system, a desktop, wallet. There is also open-source software for stand-alone devices like a Raspberry Pi.
Hard drive/Solid State Drive 500 GB.
RAM at least 2 GB
An internet connection with high limits for uploads and downloads.
Bitcoin Core is the most popular GUI for setting up a node. The Bitcoin core team, which comprises leading blockchain developers, releases new clients with bug fixes and protocol updates. Most recently, the community has been working on the significantSchnorr/Taproot update.
Users can find the instructions to set up a full node using Bitcoin Corehere.
It may take days for the entire history to download for a full node, also called archival nodes. The software needs an internet connection to perform validating tasks and sending transactions.
Bitnodeshas built a public repository of Bitcoin nodes worldwide. Users can find their nodes on this online library and also connect to other nodes worldwide.
There are other ways of running a node as well.
A pruned node is one in which the Bitcoin Core software keeps the complete data of the latest blocks only.
Pruning means removing the unwanted or superfluous part from the active components. A pruned node works similarly; it deletes a significant portion of the 350 GB information to five GB by replacing block data with index headers.
A user can specify disk space assigned to a pruned node. However, it must be greater than 288 MB, the minimum to keep at least two days worth of complete block data.
The block index holds all the metadata related to the entire blockchain.
A lightweight Bitcoin node or light node is an alternative that requires less space than full nodes. A light node only downloads the block headers instead of the entire history.
They depend on full nodes to validate transactions; the network of full nodes treats them as an extension of their work.
BTCPayServerandRaspiBlitzare popular open-source solutions that enable full node capabilities on a $100 microprocessor Raspberry Pi with a suite of other features like merchant payment processing.
The instructions to set-up a BTCPayServer on a computer or microprocessor like Raspberry Pi can be foundhere.
Future Incentives
Bitcoin nodes can also choose to participate in the lightning network (LN). All Bitcoin node software comes with the LN activation option.
The lightning network (LN) is developing into a way to incentivize these nodes. The lightning network isexpandingusing an associate relationship. If A and B have a lightning channel and B and C have one, A automatically gets connected to C.
The next step is building lightning payments and adding sufficient liquidity to Bitcoin’s second layer. An online marketplace likeLightning Poolpays LPs on the network to facilitate payments.
Disclosure: The author held Bitcoin at the time of press.
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