Nodes store all the records of the transactions from a blockchain. Nodes have the job to store and share the blockchain, while miners have the job to add new blocks to the blockchain. So, there is a clear separation in what different computers do in a crypto network.
However, what are nodes and why does a crypto network need nodes after all?
Nodes, wallets, and miners – Where people mix things up
There is a great chance that you mixed up these terms – nodes, wallets, and miners.
Here is the difference between these things.
-) Nodes are computers that store and share the blockchain with other nodes. So, they keep track of the public ledger (blockchain) and people can look up their transactions on these nodes.
-) Miners mine new blocks. So, they add new blocks to the blockchain. They take transactions from the Mempool (waiting room for unconfirmed transactions) and put them in a new block. Afterward, a transaction is confirmed.
-) Wallets are the user interface for people to interact with the network/blockchain. It can be used to receive or send funds. Sometimes, people reference to wallets but mean nodes or the other side around.
Because they are more or less the same. A normal Bitcoin wallet is a node, meaning it downloads the blockchain, connects to the network, and shares the blockchain to other nodes. Furthermore, the wallet can be used to receive and send Bitcoins.
When it comes to wallets, you could separate them into two different categories.
- Hot wallets – also referred to as online wallets
- Cold wallets – also referred to as offline wallets
A hot wallet is always connected to the network. For instance, an exchange wallet is always connected to the network, because customers constantly use these wallets. Therefore, it is a hot wallet.
A cold wallet would be a hardware wallet. Hardware wallets are usually external devices, for instance, a USB stick, where the private key is stored on and only used when you need it. So, you get more security.
There are also light wallets, which act a little bit different like the usual software wallet. Instead of downloading and sharing the blockchain, the light wallet references to a node. So, it doesn’t have to download the blockchain anymore.
For instance, multi-wallets or smartphone wallets are usually light wallets, because the devices usually don’t the capacity to store the blockchain.
Now, let’s have a look at all the different types of nodes.
All types of crypto nodes
As already mentioned, a node is an intersection with a network. The terms below are all considered as a node.
A full node is a component in the network, that download the blockchain and verifies the accuracy of the blockchain. It is also able to share the blockchain and recent blocks, but it is not required to be a full node.
Supernode or listening node
In a decentralized network, a listening node or supernode is a component that acts as a redistribution point. This would be the appropriate term for a full node. Supernodes are usually 24/7 up and require more bandwidth and CPU power because they constantly share the blockchain with others.
Miners that solo mine use their full node to maintain a full copy of the blockchain. Others choose to join a mining pool and work together. In this case, the operator of the pool maintains the full node while pool miners contribute their hash power.
Light wallets or SPV (Simplified payment verification)
Light wallets are not full nodes, because they don’t download the blockchain. An SPV client or light wallet fits in the criteria of a node. However, they don’t do much to support the network. They just store copies of the headers of all the blocks in the blockchain that are taken from a supernode.
Therefore, these clients are not able to verify transactions because they don’t have access to the blockchain. It is recommended that you put a full node behind SPV clients to securely use SPV clients as a wallet.