Blockchain Nodes: Monetize Resources and Contribute to Crypto Growth
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
Blockchain nodes are a fundamental part of the peer-to-peer infrastructure as they enable communication within the network. They are designed to support the decentralized nature of blockchain ecosystems by allowing network participation. In essence, anyone can contribute to blockchain networks by setting up a node provided they meet the required resources.
The nodes store a complete copy of the information recorded on a blockchain network, making it hard to manipulate the consensus as more node validators join the network. At the core, blockchain nodes allow users to perform functions such as confirming transactions, participating in the network consensus, and adding new blocks.
Going by their value proposition, blockchain nodes can be viewed as a network of connected ‘computers’ that bridge the crypto ecosystem. Simply put, nodes are responsible for the accuracy of the information that is recorded on-chain. This places them at the centre of blockchain networks hence playing a significant role in maintaining decentralization.
The Role of Blockchain Nodes in Crypto Decentralization
Contrary to traditional finance, crypto is built on decentralized architectures. This means that many individuals run the networks which support cryptocurrencies like Bitcoin and Ethereum instead of a centralized party, which in most cases would be a financial intermediary. To maintain this decentralized infrastructure, blockchain nodes operate as network validators whose role is to ensure that the ecosystem functions effectively and in a decentralized manner.
Notably, becoming a node validator in the crypto ecosystem has some perks. Some of these include reward incentives based on the transactions that pass through a specific blockchain node channel. These initiatives are designed to attract more node validators as crypto is still in its early stages. In addition, node validators have the opportunity to monitor the health of blockchain networks such as Bitcoin’s, ultimately reflecting in the price of the digital asset.
That said, there are many opportunities to become a node validator in crypto. Bitcoin’s blockchain, which was the first to debut, is currently supported by over 12,900 nodes, while Ethereum has over 8,300 active nodes as of press time. Other Decentralized Finance (DeFi) niche projects have also come up, providing more seamless ways to become a node validator.
What Are the Requirements to Become a Node Validator?
As mentioned earlier, some requirements have to be met before one can run a full or lightweight blockchain node; the latter type of node processes transactions quicker. They only store a small part of the information recorded on a particular blockchain network.
For networks such as Bitcoin, the process of becoming a node validator is relatively expensive and resource-intensive. This is because one needs to have robust equipment coupled with high-performing SSDs, over 50GB free space and fast internet.
Luckily, the market now features more opportunities that allow prospects to become node validators in promising projects quickly. Some of the initiatives that currently feature an easy and profitable way to become node validators include Celer’s cBridge and Minima blockchain protocol. The following section highlights how one can become a node validator in either ecosystem.
1. Celer cBridge
Celer cBridge is a product of Celer Network designed to enhance value transfer across blockchain protocols. The bridge connects Layer-1 blockchain networks such as Ethereum with Layer-2 networks including Arbitrum, Optimistic and Celler Rollups. Celer cBridge leverages an approach dubbed ‘multi-homing, which essentially replicates the presence of supporting nodes on multiple chains hence bridging the liquidity gap in crypto.
🚨 Now live! Celer’s cBridge v1.0 is a multi-chain network enabling instant, low-cost, ANY-to-ANY value transfers within and across #Ethereum #BinanceSmartChain #Polygon #arbitrum networks. More side chain and #Layer2 integrations incoming.🙌Details: https://t.co/k3c03tHkHt— CelerNetwork (@CelerNetwork) July 22, 2021
Prospective blockchain node validators can participate in the cBridge network by setting up nodes to contribute to its functionality. The protocol has a lower bound of 40% on bridging transactions, while cBridge node validators receive 50% of the profit share. Assuming a transaction of $1,000,000 is settled, cBridge node validators can earn as much as $4,000 gross margin.
Minima is another crypto ecosystem where users can run full contracting and validating blockchain nodes. This ultra-lean blockchain protocol focuses on integrating IoT devices with the blockchain world, allowing crypto users to run nodes from their electronic gadgets, including smartphones. In doing so, the protocol aims to increase its level of decentralization as more node validators can easily join the network.
We are super excited to announce the start of our IncentiveCash Program.https://t.co/a7INwGQI2m#Blockchain #crypto #testnet #Bitcoin #Minima #Decentralization #money pic.twitter.com/UuVF6DtsVr— Minima (@Minima_Global) July 5, 2021
Furthermore, Minima also features an incentive program that rewards node validators with 1x Minima coin every day. These rewards are credited to the node validators weekly. As of press time, the Minima node validating program is available through referral invites or joining a waitlist.
The crypto ecosystem is currently defined by its decentralized architecture and the opportunities to participate from anywhere across the globe freely. A big part of this decentralized aspect is supported by blockchain nodes, making them an integral part of the whole industry. Given that anyone can set up a blockchain node, the market is more hopeful of becoming further decentralized.
However, it is also important to note that running blockchain nodes on Bitcoin or Ethereum can be cumbersome. This shortcoming can be viewed as a significant challenge or an opportunity to explore other blockchain initiatives that feature node validators. More so, some of these upcoming blockchain projects are going the extra mile to feature reasonable reward incentives for network participation.
As per the ongoing trend, crypto users and prospective market entrants will likely pivot to ecosystems that enable users to set up blockchain nodes easily. This means that the level of decentralization on upcoming projects such as cBridge and Minima is poised to increase soon. That said, the crypto ecosystem is still in its infant stages and may take a little longer before stakeholders fully understand the value proposition in node validating.