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What is a Bitcoin Node?

A Bitcoin node is software that participates in the Bitcoin network. It maintains a copy of the blockchain, verifies transactions, and helps keep the network running.

Understanding nodes is important because your wallet depends on a node to function—whether you realize it or not.

What a Node Does​

A Bitcoin node performs several critical functions:

1. Stores the Blockchain​

A full node downloads and stores the complete Bitcoin blockchain—every transaction since January 2009. This currently requires around 600+ GB of storage.

YOUR NODE'S COPY:
──────────────────────────────────────────────
Block 1 → Block 2 → Block 3 → ... → Block 850,000+
                                     (and counting)

Every transaction ever made, stored locally.

2. Verifies Everything​

Your node doesn't trust other nodes. It independently verifies:

  • Every transaction follows Bitcoin's rules
  • Every block is properly constructed
  • No bitcoin is spent twice
  • No bitcoin is created out of thin air

If a block breaks any rule, your node rejects it—even if every other node accepts it.

3. Connects to the Network​

Nodes communicate with each other in a peer-to-peer network:

  • Broadcasting new transactions
  • Sharing new blocks
  • Helping new nodes sync

4. Maintains the Mempool​

Unconfirmed transactions wait in the mempool (memory pool) until miners include them in a block. Your node maintains its own mempool of pending transactions.

5. Responds to Wallet Queries​

When your wallet needs to:

  • Check if you received a payment
  • See your balance
  • Broadcast a transaction

...it asks a node for this information.

Nodes vs. Wallets​

This distinction is critical:

NodeWallet
Stores full blockchainStores only your keys
Verifies all transactionsCreates your transactions
Serves data to walletsNeeds a node to function
No private keysContains private keys
Anyone can run onePersonal to you

Your wallet needs a node to work. The question is: whose node?

                    ┌─────────────┐
                    │   Wallet    │
                    │ (your keys) │
                    └──────┬──────┘
                           │
                           │ "What's my balance?"
                           │ "Did I receive payment?"
                           │ "Broadcast this transaction"
                           ▼
                    ┌─────────────┐
                    │    Node     │
                    │ (blockchain)│
                    └─────────────┘

Why the Node Matters​

When your wallet queries a node, it reveals information:

  • Your addresses (past, present, and future)
  • Your transaction history
  • Your current balance
  • When you're online

If you use someone else's node, they learn all of this.

Random Public Nodes​

Many wallets default to connecting to random public nodes. This is convenient but problematic:

YOUR WALLET:
  "What's the balance of address bc1q...abc?"
  "What's the balance of address bc1q...xyz?"
  "What's the balance of address bc1q...123?"
           │
           ▼
RANDOM NODE (possibly surveillance company):
  "Interesting... these addresses all belong 
   to the same person. Let me log this."

Your Own Node​

When you run your own node, these queries stay private:

YOUR WALLET ──→ YOUR NODE
                   │
                   └─ Queries never leave your control

Types of Nodes​

Full Node​

Downloads and verifies the complete blockchain. This is what most people mean by "running a node."

  • Pros: Maximum verification, best privacy
  • Cons: Requires storage (~600 GB), initial sync takes hours/days

Pruned Node​

A full node that deletes old block data after verification:

  • Pros: Less storage needed (~10 GB minimum)
  • Cons: Can't serve historical data to other nodes

Light Client / SPV​

Only downloads block headers, trusts other nodes for transaction data:

  • Pros: Fast, minimal storage
  • Cons: Reduced security, must trust other nodes

Bitcoin Core​

The reference implementation that most nodes run. When people say "run a node," they usually mean running Bitcoin Core.

The Verification Principle​

Bitcoin's core principle: Don't trust, verify.

Without your own node, you trust someone else to:

  • Tell you the correct balance
  • Tell you if a transaction is valid
  • Not lie about the blockchain state

With your own node:

  • You verify everything yourself
  • You can't be deceived about your balance
  • You enforce Bitcoin's rules directly

Why Running Your Own Node Matters​

1. Privacy​

No third party learns your addresses or balance.

2. Security​

You verify your own transactions—no one can fool you with fake confirmations.

3. Sovereignty​

You directly participate in Bitcoin's consensus rules.

4. Network Health​

More nodes make Bitcoin more decentralized and resilient.

Common Misconceptions​

❌ "I need a node to hold bitcoin"​

Reality: Your wallet holds bitcoin (via private keys). A node is for verification and privacy.

❌ "Running a node earns me bitcoin"​

Reality: Nodes don't earn rewards. Mining earns rewards. Nodes just verify.

❌ "I need technical skills to run a node"​

Reality: Modern node software is quite user-friendly. If you can install software, you can run a node.

❌ "My hardware wallet is my node"​

Reality: Hardware wallets only store keys and sign transactions. They still need a node to check balances and broadcast.

Key Takeaways​

  • A node stores the blockchain and verifies transactions
  • A wallet stores your keys and creates transactions
  • Wallets depend on nodes to function
  • Using someone else's node exposes your privacy
  • Running your own node = verify everything yourself
  • The principle: Don't trust, verify

Continue Learning​

→ Next: Why Run Your Own Node — The benefits explained

→ Practical Guide: Bitcoin Node Setup — Set up your own node

→ Related: Why Privacy Matters — Privacy implications