How people use blockchain nodes in 2023: Highlights

Blockchain node is a computer responsible for storing and updating data in a decentralized network. Blockchain node interacts with its peers in order to keep the integrity of blockchain networks, add new blocks and verify transactions.

• Blockchain nodes (RPC nodes) can be used for running decentralized software applications (dApps): crypto exchanges, NFT marketplaces, DeFis, and so on;
• Cryptocurrency miners of Proof-of-Work (PoW) blockchains use nodes to solve cryptographic puzzles in order to get periodical payouts (miners rewards);
• Blockchain nodes can be used for data transfer in encrypted systems;
• Stakers use blockchain nodes together with staking deposits to participate in securing blockchain networks and getting rewarded for this contribution;

As such, in 2023, blockchain nodes are multi-purpose systems when it comes to income, privacy, and real-world applications of blockchain technology as a whole.

Blockchain nodes for dApps

By connecting to the blockchain network through a node, dApps can interact with the blockchain and perform various operations such as reading data, writing data, and executing smart contracts.

In particular, nodes play a crucial role in verifying transactions on the blockchain network. When a transaction is initiated, nodes validate it and add it to the blockchain if it meets certain criteria. This ensures that transactions are secure and tamper-proof, which is essential for dApps that deal with sensitive data.

In  programmatic blockchains - like Ethereum, BNB Chain, Polygon, and so on - smart contracts are self-executing contracts that are programmed to automatically execute when certain conditions are met. They are a key feature of many dApps, and they rely on nodes to execute them. When a smart contract is triggered, nodes execute the code and update the blockchain ledger accordingly.

Blockchain nodes for crypto mining

In Proof-of-Work (PoW) blockchains, mining is a process of finding hashes for new blocks. Solo miners and pools compete against each other in order to add a new block.

Miners use nodes to create new blocks on the blockchain. When a block is created, it needs to be verified and added to the blockchain network. Nodes play a critical role in this process by validating the new block and ensuring that it meets the network's rules and requirements.

By running a node, miners contribute to the network's decentralized architecture and help prevent any single entity from gaining too much control over the network. In modern blockchains, miners are incentivized economically as they earn cryptocurrency rewards for their work in validating transactions and creating new blocks.

Bitcoin, Litecoin, Monero and Ethereum Classic are the most popular cryptocurrencies for miners in 2023. Mining on Ethereum node had been the most popular option of Ethash mechanism before it switched to Proof-of-Stake (PoS) in 2022.

Blockchain nodes for data privacy

Blockchain nodes can be used for secure and anonymous data transfer in private (permissioned) networks. Here are five steps that are necessary to employ blockchain nodes for data transfer.

1. Define the data sharing protocol. Define the protocol for data sharing on the blockchain. This could include how data is encrypted, how access to data is granted, and how data is validated.

2. Establish identity management. Establish identity management for the blockchain network. This ensures that only authorized participants can access the data on the blockchain.

3. Develop smart contracts. Smart contracts are self-executing contracts that can automate the process of data transfer on the blockchain. Develop smart contracts that define the rules and conditions for data transfer.

4. Transfer data. Transfer data between participants on the blockchain network using the defined data sharing protocol and smart contracts.

5. Monitor and maintain the blockchain network. Monitor and maintain the blockchain network to ensure that it is secure and that data is transferred correctly.

Such systems can be used in banks, public services institutions, governance bodies, and so on.

Blockchain nodes for staking

Stakers use nodes to stake their tokens on the blockchain network. Staking involves locking up a certain amount of cryptocurrency tokens as collateral to participate in the network's staking process. By staking their tokens, stakers can help secure the blockchain network and earn rewards for their contributions.

As such, stakers help maintain the security and integrity of the blockchain network. By running a node, stakers contribute to the network's decentralized architecture and help prevent any single entity from gaining too much control over the network.

Stakers can earn rewards for their work in validating transactions and maintaining the blockchain network. The rewards are typically paid out in the form of cryptocurrency tokens, and they provide an incentive for stakers to participate in the staking process.

Also, in some blockchains, stakers can vote on network proposals using their staked tokens. Stakers can use nodes to participate in the voting process and help shape the future of the blockchain network.

Wrapping up

To sum up, blockchain nodes have a number of applications in 2023. It can be used by cryptocurrency protocols (for running dApps), by solo miners and mining pools (for cryptocurrency mining), by private encrypted networks (for confidential data transfer) and by cryptocurrency stakers for keeping PoS networks secure and getting staking rewards.