Learn Cryptocurrency
7 Mar 2022

What is a Bitcoin Node?

Devansh Sinhal

Key Takeaways

  • Blockchain technology is the reason cryptocurrencies like Bitcoin exist. Without it, Bitcoin would not have USPs like decentralization, security, or efficiency.
  • A “node” is a technical term used to refer to the computers that verify transactions on the blockchain. These nodes, therefore, work to preserve the integrity of the blockchain.
  • Every node ensures the immutability, decentralization, and transparency of the blockchain.
  • There are two types of nodes: full nodes, and light nodes.

Major cryptocurrencies like Bitcoin all run on a blockchain—a permissionless network that verifies transactions independent of a third party. In this article, we’ll explore what role a Bitcoin node plays in the blockchain, how it verifies transactions and other fun facts.

We will get right down to it, but first, some context.

What is a Blockchain Network?

A blockchain is what makes cryptocurrencies such as Bitcoin possible. Without it, Bitcoin would not have any of its USPs like decentralization, security, or efficiency.

The blockchain looks similar to a list of records called blocks. These blocks are containers of information about Bitcoin transfers. Each transfer from one user to another is thus stored in a block along with other transactions.

If one were to analyze the entire Bitcoin blockchain, one would find a record of every single transaction that has ever been made.

The blockchain, as a network, can be thought of as a digital ledger that keeps track of the bitcoins circulating in the economy. Every new transaction is recorded on the blockchain through a sophisticated process.

Here’s how it happens.

How Do Blockchains Function?

What is a Bitcoin Node?

Each block is added to the blockchain using a cryptographic technique called “hashing”. This technique makes the blockchain immutable, which means that once transactions are successfully added to the “chain”, they can’t be deleted or modified. They’re there to stay. Forever.

Every single transaction that gets added to the blockchain has to be individually verified by a group of people called “miners”.

Why are they called Bitcoin miners? Because they get rewarded in Bitcoin for their effort.

Miners contribute computing resources to verify transactions on the blockchain. They are incentivized to do so by block rewards that are automatically pushed out every time a block is mined. Convert BTC to INR at the best rate. 

Here’s the process that miners usually follow:

  • Miners compete with each other to find the next block’s “hash”, which is a long string of alphanumeric characters.
  • The miner that guesses the hash correctly gets to “mine” the next block in the chain. This means that they get the reward too.
  • Once the new block is added to the queue, it is also broadcast to the entire network, and that makes it permanent.

The block queue where new blocks are added every 10 minutes is called a “mempool”.

How Do Nodes Fit In?

A “node” is a technical term used to refer to the computers that verify transactions on the blockchain. Hence, the number of “nodes” on the Bitcoin blockchain is equal to the number of computers. They work to preserve the integrity of the blockchain. Their basic job is to prevent attempts of fraud on the network.

Types of Nodes

There’s not just one type of node, though. There are two—Full Nodes and Light Nodes. While full nodes are entirely independent powerhouses in their own right, 

Here are the differences.

Full Node Light Node
A full node is a program that fully validates transactions and blocks. They support the network by accepting transactions and blocks from other full nodes. Light nodes depend on full nodes to function.
Full nodes require large amounts of disk space to download and store ledger data from the past. They require significantly less storage because they do not download the entire blockchain.
A full node validates transactions and relays them to other full nodes and makes the blockchain immutable. Light nodes only verify transactions in the blockchain using Simplified Payment Verification (SPV) processes.

Significance of a Bitcoin Node

Bitcoin nodes are fundamental to the functioning of the Bitcoin network because of its various functionalities. Let’s look at what they are.


Nodes make sure that bitcoins on the network are circulated fairly. They audit the supply of addresses and bitcoins on the network and ensure that only those who have them are able to spend it.


Bitcoin’s blockchain is distributed across hundreds of thousands of computers around the world. Nodes make sure that every single ledger on every single computer has the exact same information as everyone else. The ledger is also open-source, which means that anyone can check the history of transactions on Bitcoin without having to trust a third party.


Nodes also relay information of new blocks on the blockchain to other nodes for safekeeping. Once this is done, transactions on the chain become immutable. This ensures that transactions once added cannot be removed or manipulated, hence making the blockchain resistant to fraud or scams.

Read all about the Bitcoin Double Spending fraud here.


Nodes, in the end, are what make or break the blockchain entirely. The existence of cryptocurrencies depends on whether the blockchain can ensure immutability, decentralization, and security—all of which are functionalities of a typical node. 

If this article piqued your interest to buy Bitcoin, you know where to find them.

Related reading:

Blockchain Consensus Mechanisms: Six Popular Types and What They Offer

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.


Devansh Sinhal

Content Writer

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