What is a full node? 

While blockchains have different types of nodes and naming conventions, having access to safe and reliable full node infrastructure is needed to deliver high-quality, consumer facing experiences. But what exactly is a full node? For Bitcoin, the world’s first blockchain, a full node is defined as, 

“…a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.”

A full node is one that stores a full copy of the blockchain and can confirm that transactions obey the rules of consensus. This is the way in which a majority of nodes agree on how to run the blockchain. Consensus is not a once-off event, as a full node will need to constantly synchronize with the chain to ensure it has the most up-to-date copy of the ledger with all new transactions. A pruned node is one in which a portion of the blockchain is downloaded rather than the full copy, as a full node may be too large. Each full node acts as an authoritative verifier of every transaction and block. The more verifiers in the network, the better the network is checked. 

Why are nodes important? 

Simply put, a node is a computer in a blockchain. They are what allow parties to participate in the decentralized ledger. This is because a blockchain is a distributed database that is operated in a decentralized manner by multiple nodes across numerous locations. Nodes are important because their combined interactions within the blockchain’s infrastructure form one unified system. Nodes are therefore the backbone of a healthy and functioning blockchain. If no nodes operated, a blockchain would cease to be. A blockchain becomes more resilient when there is a larger number of nodes, each supporting the decentralized infrastructure. The more nodes, the better! 

Nodes serve the following vital functions within a blockchain: 

  • Nodes validate blocks of transactions, confirming that they are correct. 
  • Nodes store blockchain data. Storing a copy of the blockchain is important for security and to share with newcomers of the network. 
  • Nodes communicate with other nodes, sending information across the network. This information can relate to sharing new transactions and informing peers of the latest block. 

Who can run a node? 

Anyone can run a node, as no central authority controls who has access to a decentralized ledger. Most public blockchains aim to be dynamic and decentralized, with participants constantly coming and going and nodes going offline and online frequently. Additionally, some blockchains might allow nodes to run, yet not participate in consensus. This occurs in some Delegated PoS (dPoS) blockchains, where the right for a validator to produce a block is voted on by the stakeholders. However, not everyone will have the required time, knowledge and expertise can run a node.

Needing a full node for business  

Individuals and businesses who want to run nodes are incentivized by the financial opportunities that may come with doing so. For example, miners or stakers who participate in consensus to earn rewards and businesses / developers who create decentralized applications or services linked to blockchains. All of these parties rely on a stable  blockchain infrastructure. While reliable node infrastructure is essential, each group may have different reasons for needing such a blockchain backbone. 

Investors in staking protocols rely on good node infrastructure to ensure they earn continuous rewards. These rewards come from participating in consensus, which requires a full node. Businesses involved in data analysis of blockchains would need a full node to ensure high-quality reporting. They would need a copy of all transactions from genesis up to and including a real-time look at the blockchain, in order to provide the type of analytics that add-value. Custodial services who manage funds on behalf of customers need to ensure their nodes are available and in sync with the blockchain. All of these individuals and businesses require a full node to operate. 

Common Full-Node Use Cases Apps and businesses that need nodes

Any business that wants to develop an application which interfaces with the blockchain requires a developer to have access to a working full node. To get started, they must configure a development environment suitable for a full node. Once this build process is completed, a developer must then make sure the node syncs continuously with the network they’re building on, in order to maintain 24/7 access to the blockchain for the end user. The following are some of the most common use cases that rely on full nodes. 

1. Cryptocurrency Wallets

Cryptocurrency wallets allow people to interface with their crypto assets. Typically, they allow anyone to send and receive assets, check their balances and other features which may be native to the blockchain they support (such as voting in on-chain governance, participating in staking, etc.). Full node wallets are those which sync and download a full copy of the blockchain to a user’s local machine, allowing them to interact with their wallet while holding an entire copy of the blockchain. Many popular wallets are light wallets. These wallets are hosted by a business who operates a full node of the blockchain on behalf of their users, allowing the users access to their funds without having to download the entire chain. This makes light wallets ideal for mobile applications, as users simply download the wallet app which interacts with the blockchain hosted elsewhere. 

2. Cryptocurrency Exchanges

Cryptocurrency exchanges facilitate the trading and storing of crypto assets. Many of the popular exchanges available to consumers allow trading across multiple cryptocurrencies. To support this, exchanges must support full nodes of each blockchain on their platform. Securely managing a full node is crucial for an exchange to ensure data integrity. Having access to full nodes 24/7 is key, as users need to constantly check their account balances and ensure trades are successful. 

An example of an exchange who relies on best-in-class node management is Australian exchange BTC Markets. We worked hand-in-glove with BTC Markets to ensure enterprise level node management and performance for their exchange services. The guaranteed uptime, speed, security, and support provided by us helped improve the user experience of BTC Markets as an industry leading exchange in the Australian market. The nodes required by BTC Markets were hosted in the local market, which improved their performance on the network. 

3. Staking Services

With the rise of proof of stake (PoS), validators in PoS networks work with consensus rules which make it profitable to participate in staking. Staking relies on an internal resource (the native assets of the blockchain) to mint blocks, rather than an external resource (such as electricity for Bitcoin mining). Staking services must operate a full node with continuous uptime. Not doing so means they would lose the opportunity to mint blocks when they are selected to do so by the protocol. This would result in losing money by not minting as many blocks as possible and harming their reputation by having a poorer performing service. 

Running a node for staking in PoS systems brings the dual benefit of participating in decentralization, while being rewarded for doing so. With the rise of PoS, it is more accessible than ever to receive monetary rewards and yield for participating in consensus and serving an important role in the future of the blockchain industry. 

4. Trading Desks

Trading desks offer professional cryptocurrency trading services, and therefore need to execute high volumes of orders on a consistent basis. As traders operate across a suite of blockchain platforms, they may use their own proprietary software that is separate from traditional exchanges. Trading desks often manage liquidity on behalf of clients to achieve greater returns on their capital above simple price appreciation of the underlying crypto asset. Professional trading desks require a high degree of security and reliability in their infrastructure, in order to maximise their profits. Relying on 24/7 uptime and access to the blockchains they cater to is essential. As a result, crypto trading desks require gold-standard node infrastructure. 

5. Analytics Firms 

Blockchain analytics firms often apply machine learning and data science techniques to blockchains. The goal of these analytics is to provide automated and scalable insights into the dynamics of crypto assets. Public blockchains such as Bitcoin and Ethereum create huge amounts of data based on the flow of cryptocurrency trades. Analytics firms have the tools available to monitor, analyze and visualize this data. This makes it possible to pinpoint certain types of trading activity, such as trades executed by algorithms rather than by humans for example. As clarity around cryptocurrency trading becomes more and more important for institutions, analytics firms are critically important for traders, regulators and government agencies. 

In order to tap into the highest-quality data for their clients, analytics firms require enterprise level access to node infrastructure. This means having access to a full copy of the blockchain ledger they’re working with, from inception up to and including the present day. Data is valuable, and having reliable node infrastructure is absolutely key for blockchain analytics firms to succeed. 


A healthy blockchain ecosystem relies on healthy nodes. However, ensuring the successful configuration and management of a full node for an individual or business can be a daunting task. Without system administration experience, guaranteeing a node is continuously synced with the network and operationally available is no small feat. Along with the technical expertise required is the time, energy and cost of maintaining node uptime. 

As more and more developers build using blockchain platforms, reliable and secure node infrastructure will become ever more important. Rather than focusing on the maintenance of a full node themselves, these developers would prefer to turn their attention to making their development environment more user-friendly and enjoyable. We believe that looking after a node should be convenient, affordable, safe and fast. By taking away the low-level tasks involved with node management using a service like Blockdaemon, developers and businesses can focus on what adds value to their customer base while providing a secure, reliable service. Therefore, good node management is key to a great user experience. 

How Blockdaemon can help you 

Our experience running nodes on every major network has led us to develop market leading tooling to help reduce the risk of managing nodes. We manage, maintain and upgrade your nodes to ensure uptime and peak performance. Our team is embedded in each protocol community we support, making sure our deployments stay ahead of the curve on all network updates on behalf of our customers. Blockdaemon’s proprietary monitoring systems ensure that optimal health of every single node we manage is maintained. We achieve all of this with 100% security guaranteed. This means your node is yours exclusively without the risks of shared resources. 

Would you like to learn more? Get in contact with us today.