A full node is the main differentiator between a hobbyist and a first class Bitcoin citizen.
Realistically speaking, you can never be sure that the BTC in your wallet is real and valid unless you run your own node. If you are not running your own, you will by default be trusting someone else to carry out this responsibility for you. Since Bitcoin is all about eliminating trusted third parties (which are considered security holes), it is highly recommended to verify your own transactions.
In Bitcoin’s system of checks and balances, nodes are the fact-checking historians. They are the actors that constantly enforce the rules and keep the miners in check. Thanks to a full node, we know that all the transactions since the Genesis Block have been valid, and therefore we find ourselves on the right chain. Nodes are the last line of defense in ensuring that the coins in your wallet are legitimate - making the very idea of fraudulently created Bitcoins impossible.
There is an infamous inflation bug from 2010 that took the network down for 8 hours and proved the necessity of good and properly-audited code for Bitcoin software. Fortunately, we have now reached a stage where enough people verify each line of Bitcoin code. Today, everything released under the Core umbrella receives proper testing and is extremely safe to use.
Bitcoin Full Nodes and Privacy
Running a full Bitcoin node isn’t just an act of altruism for the network. It helps you keep the privacy of your unspent bitcoins (UTXOs) and also empowers you to choose the Bitcoin software that satisfies your needs. Receiving a transaction on a full node enables you to be the first person to see when it gets propagated. Conversely, using a “light” SPV wallet means that you let someone else validate your transaction and in some cases only see the funds get added to your balance after the first network confirmation.
Letting other nodes validate your transaction also means that you let someone else know how many bitcoins you’re transacting. This is terrible for your privacy, and everyone who has ever run an Electrum server knows that they store the transactions of thousands of random users across the world. You wouldn’t want the store clerk to know how many dollars you keep in your wallet, and likewise you should be cautious about allowing lots of random people on the internet know how many BTC you own and transact.
Privacy is one of the most overlooked aspects of Bitcoin. However, just because some people neglect it doesn’t mean that you should do it too. As blockchain analysis companies develop more sophisticated methods to associate Bitcoin addresses with real names, we should learn to better protect our transactions. For more information about privacy in Bitcoin, refer to this BTSE Academy article.
Bitcoin Full Nodes and Autonomy
The beauty of Bitcoin is that only a few rules are mandatory, and every other feature is optional. For instance, your node software must agree with the total supply, new block propagation rules, and diminishing inflation rate. But when it comes to SegWit, RBF (Replace By Fee), and the upcoming Schnorr signatures, you can simply opt out. Even though it’s not recommended, you can also run a Bitcoin-qt client version from 2013 and still be able to participate in the network governance like every other node.
In other words, Bitcoin full nodes take your autonomy to the next level. By opting for a particular software version, you choose to use or ignore several features that have been added. According to the recommendations of Bitcoin Core developers, it’s better to use a version that’s newer than 0.17.1 – so that you are safe from previously-discovered bugs.
If you’re technically savvy, you can even take away features from the 0.17.1 version client (or a newer one) in order to build your own minimalistic node software. As long as you respect the most essential rules, you can remain connected to the chain and be in tune with every other node.
In a world where everyone must respect the same rules and requirements, Bitcoin is liberating by enabling power users to only pick the features that they find useful or safe. Therefore, nobody is forced to upgrade to the latest version and you can even leave your node running for years and be sure that it will still be in consensus with the network when you check it again.
Bitcoin Full Nodes: Buy or Build Your Own?
Possibly the most important discussion involved in this radical decision of embracing financial sovereignty via proper verification is about choosing between open-source software that you install on your computer yourself, or purchasing a piece of hardware that only serves the purpose of running a Bitcoin full node.
Depending on your technical level, time, and budget, you can spend anywhere between zero to $300 on your setup. If you know what you’re doing, all you need is a large hard drive and a relatively new computer (if it was released in the last 10 years, then it’s good enough).
The most important part involved in building our own full node is actually about the software that you choose. It’s highly recommended to use a new version of Core which has been thoroughly tested. Anything released after 0.17.1 is safe, and you can get 0.19.1 for the most up-to-date features and bug fixes.
From this point on, the setup is a pretty straight-forward point-and-click experience. You just have to pick where you want Bitcoin Core to be installed, and then wait for the initial synchronization (that can take as long as 2 weeks, depending on your system’s RAM allocation, processing power, and internet connection). If you use a SSD instead of a HDD, you also benefit from a significant boost thanks to the faster writing times.
For reference, you can use Rex Kneisley’s guide for Windows, Teklordz’s step-by-step video walkthrough for Linux distributions, and Paris Nakita Kejser’s instructional video for MacOS.
If you want to build your own node using dedicated hardware (as opposed to your laptop or home computer), then you are going to need to buy a computer (a Raspberry Pi will suffice), a hard drive (1TB SSD is ideal), and the required cables. Overall, the investment should cost somewhere between $200 to $300 – depending on the Raspberry Pi version your choose (the 4 GB edition being the most powerful, but also most expensive), and the quality of the external hard drive (Samsung is known to make the most reliable SSDs).
For a complete guide which includes hardware and software choices, watch Ben from BTC Sessions run a full node with a relatively cheap setup and MyNodeBTC’s open-source software. The video is presents every step involved in the process and proves how simple it has become to operate your own Bitcoin node.
Building & Installing myNode Software
Connecting Bitcoin Wallets To myNode
If you don’t trust your own skills and would rather pay to have everything delivered to you in a functional state, then you should look for “node in a box” solutions like MyNodeBTC and Nodl. Trusting someone else to do the job for you is not in the true cypherpunk spirit of Bitcoin and should not become the norm, but these pre-made turnkey solutions can help you learn how everything works and boost your self-confidence when it comes to Bitcoin hardware.
After you spend some time with the “node in a box”, you will figure out that building one isn’t very hard. The hardware is general-purpose, common, fairly easy to find in most electronic stores, and the software is open-source and free to use or audit. Sooner or later, you should embrace full sovereignty and stop trusting devices made by companies, as they can potentially become a security hole if the proper incentives exist.
When it comes to running a full node, it doesn’t get much simpler and more effective than installing Bitcoin Core and using it properly. There is definitely a lot more that you can do with the the basic software (such as adding Tor integration and Lightning Network features), and you should take baby steps towards becoming truly sovereign.
There are lots of instructional YouTube videos that you can watch and thousands of articles written on the topic. If you happen to struggle with the process, you will always find someone helpful on Bitcoin Twitter.
What really matters here is that you learn more about how Bitcoin works and maximize your financial sovereignty. It’s not a process that happens overnight, but a necessary step in order to fully unlock the potential of this disruptive, stateless, and truly decentralized currency.
If you have any feedback on this or any other topic, please feel free to reach out to us at any time at email@example.com or @BTSEcom on Twitter. We always love to hear from our amazing BTSE community.