To validate and relay every transaction of cryptocurrency, a computer must be linked to that cryptocurrency’s network to support the verification process. This computer is a node.
There are two types of nodes: full nodes and lightweight nodes.
FULL NODES
Each time a full node must verify a transaction, it receives a full copy of the blockchain to ensure all the data is correct before relaying the information. Full nodes are connected with other full nodes and together support an entire network by sharing, accepting, and validating these outside blocks. By creating an abundance of full nodes, a network becomes further decentralized and trustless. For example, if a network had only one full node, if something was to fail or be hacked inside that node, that single point of failure would collapse the entire network. When there are countless full nodes sharing the same information, it would be impossible to damage the network. This is the core of decentralization!
A full node’s primary function is to validate every block and transaction presented to it in accordance with the network’s consensus rules. These specific regulations are unique to each network. If a node finds a block to infringe upon the network’s consensus, that block will be rejected by the node and cannot be added to the blockchain. In this way, full nodes are trustless since they deny any block that violates consensus based on their network coding.
LIGHTWEIGHT NODES
As the name suggests, lightweight nodes function as a solution to do similar tasks as full nodes but on a much smaller, lighter scale. Lightweight nodes use simplified payment verification (SPV) to verify transactions by only downloading the header of the block rather than the entire blockchain.
Using SPV, the nodes only activate when they are relaying transactions or are notified to connect to full nodes to exchange data. Both the previous functions significantly reduce storage requirements, freeing up the network and allowing it to run smoothly.
MINING & STAKING
Full nodes also hold another branch of nodes: mining & staking. Mining nodes are the process of attempting to complete a cryptographic puzzle by guessing the combination. This is done via a mining rig or computer. By completing a combination, a new block is formed and the miner receives an award. This process is known as “Proof of work.”
Staking nodes or “Proof of stake” is the protocol used for governance over a network. Stakers take part in a contest by holding a required amount of coins under a specific contractual period. The network then accepts the staker into the competition. The winner of this competition is determined by several factors: how many additional coins are being staked, the staking period, and randomization. The winner receives the contract to forge the next block of transactions, and in addition, reaps a reward in coins also.
Finally, we have the full nodes that stabilise and complete the network’s ecosystem: master nodes. These nodes offer unique capabilities such as private or instant transactions, pool / treasury management, and governance voting.
