Bitcoin and Its Nodes

Since the end of last year, I Decided to run my own Bitcoin Node. 

Discover the power of running your own Bitcoin node and become a citizen of the decentralized financial future. Learn how a Bitcoin node functions as a transparent and trustworthy registry, enabling secure transactions and preserving the universal truth of the Bitcoin network.

What Does That Mean?

The best way to explain what a bitcoin node is is to compare it not to the financial system, but to the land registry system.

A node is like a very simple land registry, as it only keeps the record of transactions of a single type of "asset," units and fractions of units of bitcoin (called UTXOs in the protocol).

In the physical record of a property, called a registration in Brazilian law, we find transaction blocks, which are nothing more than the memory of what happened to that property, for example, who sold to whom and for how much.

Bitcoin Nodes

Anyone who has bought or sold a property in Brazil knows what I'm talking about. To make sure that the transaction has actually taken place, you need to go to the land registry office and request a copy of the registration.

Only with the copy of the registration can you know the history of that property and verify if what was contractually agreed upon was registered in the property's registration. Otherwise, the transaction simply didn't occur.

A bitcoin node works in the same way. It maintains a copy of all the blocks that store bitcoin transactions, and each block can store hundreds of transactions.

Approximately every 10 minutes, a new block is created, containing new bitcoin transactions. If I run my own node on my computer, it will automatically check with other nodes if the information created by the new blocks is the same, if they "match."

The importance of this is to verify if that unit of bitcoin is unique and has not been transacted twice, and if those addresses are accepted addresses on the network.

In summary, a node verifies if the transactions that make up that block are valid.

However, there are two radically new things in bitcoin compared to the land registry system for property registration.

The first is that anyone can run a copy of this node on their own computer.

The state registration systems we know are centralized and limited to their respective jurisdictions. If the files of a land registry are destroyed or if the ownership regime in that jurisdiction changes, for example, through state confiscation, it is no longer possible to know who owns which property.

Bitcoin nodes have no boundaries. They are distributed globally and for free; you just need to download the software.

The more nodes containing this copy, the more decentralized the bitcoin network becomes. In fact, on this website, you can see where the nodes are located in different countries around the globe: https://bitnodes.earn.com/

It's as if there were hundreds of thousands of copies of the same registry office with the same records all over the world. To be a first-class citizen of bitcoin, you must have your own registry office and not rely on someone else's office, on the "copies" that someone might show you.

It is no wonder that one of the mottos of the bitcoin community is: "don't trust, verify."

The second innovation of bitcoin was to separate two important functions. One function is the one I just described: keeping the node running, that is, keeping copies of transaction blocks; the other function is to be the notary of this mini-registry, which is responsible for recording new transactions.

This latter activity, that of being the notary of bitcoin, is called "mining" and is carried out by a verification and remuneration system called Proof-of-Work (PoW).

It is up to the miner, or the notary, to group all the transactions within a new block before sending it to the nodes to store in their records.

Now you may ask: Why have an exactly identical copy of all transactions in various places around the world?

A copy so identical that no one can distinguish the copy from the original version? Isn't that incredibly inefficient? Couldn't I just have a single copy and trust it, all in one server or place?

Here's the key point. The global distribution of nodes makes bitcoin the truth machine in a post-truth world. Its extreme decentralization means that I don't have to trust anyone to access its truth.

Bitcoin is the closest thing that humans have produced to a universal truth. Other universal truths, such as the laws of physics or the laws of mathematics, have been discovered by humanity. Only bitcoin was created.

Like the Portuguese or English language, it is a non-corporeal human creation, and its existence is transmitted to us through shared bits of information worldwide.

And this brings us back to the problem of trust and truth.

We don't trust anyone to access the truth. We don't trust the media, the government, the banks, or even our friends who are trapped in social media bubbles.

The consequence of this is that it is increasingly difficult and expensive to verify whether the information that reaches us is true or not.

But still, we need to have a practical life.

We need truth to survive, and we need a reliable place to store and transact the wealth produced.

An airplane pilot needs to trust the control tower to provide true information about whether it is the right time to land the aircraft. We need to pay the butcher a certain amount, and he needs to receive the same amount, with the money coming