Day 245Part 7: How Bitcoin Works

What Is A Node

A Bitcoin node is a computer that downloads the entire Bitcoin blockchain and independently validates every transaction and every block against Bitcoin’s rules.

Nodes don’t mine. They don’t earn Bitcoin. They don’t need to be powerful or expensive. They just verify — continuously, silently, independently.

Here’s what a node does every ten minutes when a new block is found.

It receives the block from the network. It checks every transaction in the block: were the coins actually available to spend? Were the digital signatures valid? Were any rules broken? It checks the block itself: is the proof of work valid? Is the hash correct? Does it link properly to the previous block?

If everything checks out, the node adds the block to its copy of the blockchain and passes it on to other nodes.

If anything is wrong — even a single invalid transaction — the node rejects the block entirely, regardless of who produced it.

This is the quiet power of the node network. Miners produce blocks. Nodes decide whether those blocks are valid. A miner who tried to create Bitcoin out of nowhere — to give themselves more than the block reward allows — would have their block rejected by every honest node on the network. The fraudulent coins would never be accepted.

This is why nodes are described as the true enforcers of Bitcoin’s rules. Miners do the work. Nodes check the work. The rules are whatever the node network agrees to enforce.

Running a node is how individuals participate in that enforcement — not just trusting that the rules are being followed, but verifying it themselves.

Tomorrow: miners vs nodes — two different jobs that are constantly confused.

— The Daily Bit

Part of The Daily Bit — 365 days to understanding Bitcoin.