Nodes in the blockchain: how they work, why they are needed, and how to make money on them

What are blockchain and nodes?

In the world of cryptocurrencies, nodes have long ceased to be just a technical element. Now it is an opportunity to earn money, test new technologies, and improve your knowledge of Web3.

Nodes in the blockchain are computers that store information about transactions and ensure the operation of the entire network. They verify and confirm every transaction. Imagine blocks as “pages” in a book where all transactions are recorded. Nodes help to organize these pages into a reliable and unchanging chain.

It’s quite simple: the basis of any blockchain is decentralization. If a project launches all nodes independently, it is no longer a blockchain but a centralized system, where it is difficult to talk about independence and security. But when nodes are launched by users from different parts of the world, the network becomes more stable and more trustworthy.

For the projects themselves, it is also a way to attract active participants to their ecosystem. Those who launch nodes do not just support the network, but become its ambassadors, test new features, and disseminate information. And projects reward them for this with tokens, access to platforms, or other bonuses. This is a profitable partnership: participants earn money, and the project builds a strong decentralized infrastructure.

How to make money on nodes?

This topic is complex, but that is why it is interesting, sometimes even exciting. If you approach it wisely, you can get good results.

Test networks

Many projects generously reward those who run nodes on their testnets. Here are some real cases:

• Celestia: participants received up to 60,000 TIA (maximum price – $20.91). The amount of reward depended on the role, for example, light nodes brought 8,000 TIA.
  
• Aptos: even for a simple form, participants received 300 APT (ATH – $19.90).
• Forta: the spring 2022 testnet brought participants from $3,000 to $5,000.

It should be understood that launching a node can be a process that takes several months and sometimes years. But there are cases when the result comes earlier than you expected.

Long-term nodes

Many projects require regular updates or technical issues. And although earnings may not come immediately, it is worth remembering that successful projects can bring significant profits in the future.

There are also short-term programs. For example, Stride rewarded up to $400 per month of participation through a delegation.

How to reduce costs and risks

Here are some tips to make this process more profitable:

1. Server optimization. You can run several nodes on one server. For example, a $50/month server can support more than ten nodes.
   
2. Diversification. Participation in 10-15 testnets increases the chances of success. Even if only one of them turns out to be successful, you will cover the costs and earn money.

Success strategy

An example of one noder: in 2022, he launched dozens of nodes, including Aptos and Taiko (the testnet lasted about two years). As a result, his profit amounted to a five-figure sum, while the cost of servers amounted to $1,500.

Although experience is of great importance in this business, newcomers who are motivated can also get lucky. This is a challenging but promising niche.

How to launch a node?

Launching a node may seem like a daunting task, but it is actually quite realistic, even if you are a beginner. The main thing is to stick to the plan and understand the basic principles. We will tell you how to do it below.

Choosing a node type

First of all, you need to determine what kind of node you want to launch. Here are the main options:

1. Full Node: stores the entire blockchain, verifies and confirms transactions.
   Example: Bitcoin Core.
2. Light Node: loads only block headers and works on the basis of full nodes.
   Example: nodes in Avail.
3. Mining node: creates new blocks using the Proof of Work (PoW) algorithm.
   Example: Aleo.
4. Validator Node: operates in networks based on Proof of Stake (PoS), verifying blocks and using its coins for staking.
   Example: Ethereum 2.0, Cosmos.

If you are just starting out, a lightweight node will be a great choice as it consumes fewer resources.

Choice of hosting

Your server is the foundation for your work. The options are as follows:

• VPS/VDS – suitable for small projects. It’s like an apartment where you share resources with your neighbors. Ideal for beginners.
  
• Dedicated Server (DS) – a powerful server with resources completely at your disposal. It is suitable for advanced users and more complex nodes, such as Taiko. The price is higher, but the possibilities are wider.
  
• Home computer is not the best option, as you need a stable 24/7 connection.

One of the most popular noder hosting services is Hetzner. Although it has been officially banned from hosting nodes since May 2021, many testnet sites still operate on this platform. Here you need to carefully monitor the state of the servers to avoid overloading.

Installation and launch

When the hosting is chosen, proceed with the following steps:

1. Install the OS and prepare the server. The most commonly used Linux, Ubuntu. Make sure that all updates are installed.
   
2. Follow the official documentation. Projects usually provide step-by-step instructions to help you avoid mistakes. For example, Celestia has a user-friendly interface, while Massa requires frequent software updates, and a missed update can get you kicked off the testnet.
3. Configure ports. Each node uses specific ports. If you plan to run multiple nodes on the same server, make sure that the ports do not conflict.
   
4. Check synchronization. Make sure your node is synchronizing with the network.

Congratulations! Your node is ready to go.

Node support: what should you take care of?

Launching a node is only the first step. For its stable operation, you need to constantly keep your finger on the pulse.

Systematic monitoring

• Tools: Use Prometheus, Grafana, or similar systems to monitor your system. They will help you monitor CPU and memory utilization and detect skipped blocks.
  
• Alerts: Set up services like TenderDuty to automatically send alerts to Telegram or Discord if the node starts to lag behind the network.

Updates are a must-have
Networks are constantly changing, so keep your node “on trend”:

• Check out the news and updates from the project team.
• Perform updates through the official documentation teams.

Logs – your assistant
If a node fails, the first thing to do is:

• Check the logs – there are always clues to what went wrong.
• Don’t hesitate to reach out to the community – you can often find ready-made solutions on forums, Telegram, or Discord.

Backups save lives
Save important files: keys, configurations, etc. This is especially critical for PoS nodes. If something happens to the server, a backup will allow you to quickly resume work on another machine.

Can I run multiple nodes on the same server?
Yes, it is possible, but you need to make sure that the ports do not conflict. If one node occupies a certain port, you need to configure another one for the second one.

Cost optimization
Not all projects reward revenues, so sometimes it makes no sense to spend a lot of money on expensive servers. You can run several nodes on the same server or choose a budget hosting, for example, Selectel or Contabo.

Conclusion

Yes, making money on nodes seems difficult, but with the right knowledge and patience, it is quite possible to succeed. The main thing is not to be afraid to experiment, try, and learn. Step by step, and now you are a confident NodeRunner with a portfolio, and the rewards start coming to your wallet.