Deploying and running a Bitcoin node may be easy for the tech-inclined ones, but for the non-tech-savvy ones, this may sound foreign. If you plan to deploy and run a Bitcoin node, it will be a good idea to learn how to do that on your own rather than depending on your tech team. Learning to set up your own Bitcoin node is something that is worth the effort.
If you are thinking about running a Bitcoin node but don’t know how to, this post will give you a rundown of how to do it as well as tell you the cost of running a Bitcoin node.
What is Bitcoin?
Bitcoin is the first decentralized peer-to-peer network that isn’t under the control of a particular entity or centralized group. This network is owned and controlled by everyone who takes a part in it. Bitcoin is run by a Proof-of-Work consensus mechanism that validates transaction processes to prevent the network’s performance and security from being jeopardized.
Consensus mechanisms are methodologies used to achieve an agreement in a network. They are like the authorities in the centralized sphere. By Proof-of-Work or PoW, miners use highly intensive computational power to solve complicated puzzles to mint new bitcoins and keep the blockchain running at the optimum capacity.
What Are Blockchain Nodes?
Blockchain Nodes are electronic machines that act as servers. They are connected to a communication network, such as Bitcoin to allow the creation and transmission of information over the network. The Bitcoin network depends on the nodes’ inputs to verify transactions completely or partially independently. The nodes share their findings with other nodes to further analyze the transactions and confirm their authenticity.
Nodes are controlled and operated by the users. Think of them as attaching your computer to Bitcoin and controlling the nodes to protect the network from fraudulent attacks. This approach democratizes blockchain, discarding the need for a centralized authority.
Bitcoin node scans every new transaction added to the chain and ensures that they don’t mess with transaction history. The higher the nodes in the chain, the more decentralized and solid it becomes. It’s no news that decentralization is a core part of Bitcoin, and that accounts for its $800B evaluation. Running a node has led to the growth of the network tremendously.
However, with more decentralization in the network, there’s a need for more people to run their nodes to validate blocks individually. This will expedite processing time and further grow the network.
It’s crucial to mention that two types of Bitcoin nodes exist – Full nodes and lightweight nodes. A full node is a resource-intensive approach to assuming the role of a validator. As a full node validator, you are tasked with validating all the transactions performed in the network. You can access the whole ledger and update it immediately when new transactions are added.
Lightweight nodes aren’t as resource-intensive as their full-nodes counterparts. Instead of downloading the entire ledger and confirming all the transactions, lightweight nodes only pick the most crucial data when processing transactions. An example of this node is the lightning node.
A lightning node is an L2 scaling solution that executes transactions instantly at a significantly reduced fee on the Bitcoin blockchain. This node runs on top of the full nodes, facilitating payments at affordable fees. Users deploying this node use Raspberry Pi machines instead of computers.
You should know that not all Bitcoin nodes are miners, even though it’s somewhat impossible to separate them. As explained here, nodes validate blocks. On the other hand, miners install mining equipment to solve challenging mathematical puzzles, earn new blocks, and load transactions. Bitcoin nodes validate the newly mined block and the transactions loaded into it.
Benefits of Running a Bitcoin Node
Having explained what a Bitcoin node is, you may ask: what are the benefits of running a node on the Bitcoin network? There are many benefits attached to this.
Increased Robustness of the Network
One of the great benefits of deploying a Bitcoin node is to increase the robustness of the network. As pinpointed earlier, the number of nodes in the network determines its efficiency and level of tenacity against hacks. The higher the number, the better. This is also key in strengthening the decentralization of the network.
Greater Exposure to the Network’s Ecosystem
Another benefit of running a node on the network is to have greater insight into the ecosystem. You can have a first-hand view of the network’s status and monitor other proceedings. This will help you make the right investment decisions.
In addition, it’s easier for node operators to examine if the coin is a counterfeit, forked, or if the user is trying to do double spending since you can access the data on the chain. Double spending occurs when the user sends BTC in their balance to two separate individuals concurrently. Bitcoin nodes are tasked with reconciling the sender’s balance so that such a scenario doesn’t happen again.
Privacy in Transactions
Running a Bitcoin node means you don’t have to give up your private details to anyone or third-party wallet companies when sending or receiving BTC. It offers the most secure and confidential method of transacting bitcoin.
Active Participation in the Ecosystem
Deploying a Bitcoin node offers an environmentally friendly way of being part of the Bitcoin community. In the past, and even currently, BTC energy-intensive mining has been heavily debated amongst environmentalists. If you want to exempt yourself from such issues, operating a node is the best way to be part of the mining community.
Unlike BTC mining, you don’t necessarily gain any financial reward for running a node. However, some node providers do incentivize users for managing their nodes efficiently.
Requirements for Running a Node on the Bitcoin Ecosystem
Here, we will be talking about the hardware and software requirements for operating a Bitcoin node. As you know already, full nodes download the entire data from the blockchain, analyze it, and send back the processed data into the network. Therefore, you need to meet the requirements to run the nodes efficiently. Let’s start with the hardware requirements. You need
● A desktop with a configuration of a minimum of 500 GB HDD and 2 GB of RAM. When downloading the Bitcoin data, the size could go as high as 350 GB. So, you need a vast amount of storage space to accommodate the data. Plus, the blockchain increases by an average of 1 GB every seven days. Hence, space is a core requirement.
● OS like Linux, Windows, or MAC.
● A data or Wi-Fi connection with a speed of a minimum of 50 Kbps. You must ensure that your ISP doesn’t have any upload or download limits. We advise that you go for unlimited broadband packages.
● A minimum of six hours every day to run the node.
As for the software requirements, you need to look for the best Bitcoin node software, download it, and install it on the device before you can begin to download the Bitcoin blockchain. It takes about a week or less to download the entire blockchain. The good news is you don’t have to download the ledger again. You just need to update the copy to reflect the most recent transactions.
You may ask: why do I need software to run a node? To run a full node, you need to install a client or software. Nowadays, users install the Bitcoin Core software due to its compatibility with diverse operating systems, such as Linux, Windows, etc. Bitcoin Core could either be downloaded as Graphical User Interface or Daemon. These require different expertise to run, with the Daemon the more sophisticated one.
Once the Core has been installed, don’t forget to readjust the firewall settings and network to the software’s standards.
How to Run a Bitcoin Node on Cloud
You can run a Bitcoin node individually or on a cloud. However, since we are dealing with running a node on a cloud, this is where we will focus more.
Many people opt to run their nodes on a cloud, such as Google and AWS because they struggle to keep up with time. Running a node is time-demanding. So, your best bet is to operate it on cloud services.
We will be using Google as our cloud service. To get started, you need to register a Google Cloud account. Once fully set up, follow the steps below to run a Bitcoin Node.
1. Select the VM Instances option to set up a Virtual Machine.
2. Since the lightning node isn’t resource-intensive, you can opt for an Ubuntu installation with 1vCPU.
3. Navigate to “Network Interfaces” to configure the firewall rules for 8332 and 8333 ports. The first port communicates with JSON-RPC nodes, while the latter interacts with other nodes on the protocol.
4. Download the Bitcoin Core client. We recommend setting this up by running daemon. After installation, the client will download the blockchain ledger. It could take days before it’s fully synchronized.
5. After synchronization, verify the connection by checking https://bitnodes.io/. Check for the Virtual Machine IP at the page’s bottom. Once the instance shows, it means your node is fully set up.
Frequently Asked Questions (FAQs)
How do I run a blockchain node?
First, you need to ensure that you meet all the requirements, such as having ample storage space and good RAM on your computer alongside an unmetered data connection. The next step is to download and install the Bitcoin Core software and then allow it to download the entire blockchain. Your node will verify new blocks added, including the transactions.
Can you make money running a blockchain node?
Monetary or financial gains aren’t attached to operating a Bitcoin node. However, it comes with other benefits, such as more insights into the network and increased transaction security.
How much does it cost to run a Bitcoin node?
That depends on whether you are running it individually or on a cloud. For the cloud, it could cost up to $400 if you factor in the cloud server package. It should cost less if you’re running the node individually.
The good thing about running a Bitcoin node is you don’t have to run it yourself. You can entrust it to blockchain nodes management platforms like Zeeve. We offer the most robust, hack-proof, and cloud infrastructure for deploying and managing blockchain nodes across over 30 protocols. We aim to use technology to ease performance, security, and operational challenges, thus saving you time for other demanding tasks.
Zeeve is an enterprise-grade Blockchain-as-a-Service platform enabling the development, deployment, and management of blockchain applications. Leveraging our diverse and deep set of skills, Zeeve can implement multiple Blockchain protocols on-premises and over the cloud. Our cost- and time-efficient processes facilitate the reliable and secure establishment of a blockchain network.
To have your own decentralized apps with alacrity, you can collaborate with Zeeve, specializing in dApp services. Sign up now to get your first blockchain application rolling.