Individual computers participating in a blockchain network are known as ‘nodes’. These nodes may simply keep a copy of the current blockchain ledger, as members of a decentralised network, or they may act as mining nodes and compete to update the blockchain in return for rewards.
In private, ‘permissioned’ blockchains, nodes must be authorised to read or write to the network, and varying levels of access can be set depending upon the business need.
In contrast, ‘permissionless’ public blockchains such as Bitcoin allow anyone to run a node, simply by downloading the free software and then leaving a port on their computer open to allow the transfer of data in and out.
How Big is the Bitcoin Blockchain?
New nodes must first download the current, entire blockchain, which in the case of Bitcoin amounts to over 210 GB of data (April 2019).Some nodes act as miners, and these do the work of adding new transactions into blocks and appending these blocks to the blockchain. For most established blockchains this mining involves nodes competing to solve a mathematical puzzle, using a consensus protocol known as proof of work.
The winning node receives a reward in the form of newly-minted crypto-tokens. These might be bitcoin, ether (ethereum), litecoin, or whichever token the particular blockchain employs.
What is the Bitcoin Block Reward?
In the case of bitcoin, the current reward is around 12.5 bitcoins per block (halving in summer 2020), putting the value of the reward at over £100,000 (at mid-June 2019 price).There are attractive commercial opportunities inherent in mining many of these cryptocurrencies, then, and this has resulted in the creation of ever more powerful and costly computers, such as the dedicated ASICs that began to appear in late 2012, and the grouping of these computers into huge mining ‘farms’.
Whereas the Bitcoin whitepaper originally envisioned individual home computers using CPU power to mine blocks, today nodes are more likely to be part of large-scale industrialised operations, located where energy is cheap or the ambient temperature naturally low.