Bitcoin Node Owners Do Not Need Incentives

The Bitcoin network is only as strong as the number of miners and nodes supporting the protocol. At this time, there is no shortage of mining power pointed at the Bitcoin network, but the number of nodes remains fairly low in comparison. Some people feel more nodes would be active on the network if there were some reward for doing so. But isn’t being part of Bitcoin itself the biggest reward one can get for running a Bitcoin Node?

Also read: Platform Issues Continue

Bitcoin Node Incentives Is A Touchy Subject

TheMerkle_Incentive Bitcoin Node

In the perfect world, Bitcoin nodes could end up receiving a reward similar to the small amounts of funds collected by Bitcoin miners for adding transactions to the next block on the network. However, the technology was never designed to operate in that regard, as running a network node is entirely voluntary and not subject to incentives.

Certain people might feel this form of distributing the transaction fees is not fair, as Bitcoin nodes are an integral part of the ecosystem. Without nodes to broadcast transactions and keep copies of the blockchain synchronized with the network at all times, the entire Bitcoin ecosystem would be far less secure than it is right now.

Running a Bitcoin node is not mandatory by any means, as it remains up to the individual user to do so, or not. As we covered in a previous article, running such a full network node consumes a fair bit of bandwidth per month, indicating some form of reward would only be just. At the same time, the question is where this reward will be coming from to begin with.

There are other reasons why Bitcoin node owners are not getting an incentive to do so as well. First of all, running a Bitcoin Node does not require dedicated hardware, and there is no proof-of-work involved in the process. Being a bitcoin node means running the Bitcoin wallet on a 24/7 basis with connections to other nodes in the network.

Furthermore, creating incentives for Bitcoin node owners would open up the system to cheating and spoofing. Users would be able to run a pseudo-node, which would reap the incentives without being a proper part of the network. This is why proof-of-work requirements are a better solution, as those who do not put in the work, will not be rewarded.

In the end, the biggest reward a user can get is being an active part of the Bitcoin network. Unlike traditional finance, every Bitcoin user is an integral part of the ecosystem and makes transactions possible all over the world. Even those who are not running a full Bitcoin node are of great importance, simply for running the wallet or being involved in the concept of Bitcoin altogether.

Source: Reddit

Images credit 1,2

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.

  • Milly Bitcoin

    What kind of reporter uses Reddit as their only source? You are the worst reporter in the Bitcoin space.

    • Reddit is being used as the source for the discussion, not only as the source of content. We could have omitted the reddit source but if people want to read more regarding this issue they can visit the source link provided.

      • Milly Bitcoin

        That does not explain the poor quality of some of the articles posted here.

        • Please point out the issues in the articles and I will make sure to fix it.

          • Milly Bitcoin

            You would have to delete most of the articles to fix all that. I see this domain is kept under private registration. lol

  • Definition

    Terrible research. Actually zero content plus loads of ignorance. DASH has collateralized full nodes and its node count is about to surpass that of Bitcoins. It has the fastest syncing network thanks to dedicated hardware and its nodes receive 45% of the block reward from mining. Its been two years and it all runs like a charm.

    • Bitcoin is not like Dash. I am not saying Dash’s way of rewarding nodes is inferior as its clearly not, its just that the way the Bitcoin protocol works right now there is no reward being issued to nodes as there aren’t any mixing protocols in action. It would be great if the core or classic team can start working on that but I doubt we may see that feature in Bitcoin any time soon. Only goes to show that competing currencies might have a chance against Bitcoin after all.

      • Definition

        Bitcoin must survive for altcoins to be succesful as well! The Dash community is convinced that Bitcoin is digital gold and a perfect store of value, while Dash can be used for day to day transactions thanks to instantly confirmed transactions (Ethereum for smart contracts, MAIDSAFE for sharing resources etc., basically a self complementing eco-system). The dropping node count is a worrying development which must be remedied asap. The huge hashing power of BTC represents a millions & millions of dollars infrastructure and is not likely to go away any time soon. However having only a centralized few full nodes is a menace to the security of the network. The fact that Blockstream is abusing the indifference of Chinese miners to leverage power against the wishes of the majority is a despicable development. If Bitcoin fails, cryptocurrency fails. I’m convinced of that.

      • Definition

        I guess what I wanted to say is that we must fix Bitcoin governance. In Dash you can vote with your coins. For example if we had a dev team going rogue, all masternode owners could vote them out of funding (which comes directly from the blockchain) and they’d have to develop for free. I’d love to see Peter Todd trying to implement idiotic crap like RBF when no one wants to pay him. The model of Dash might not be perfect (what is?), but it is a giant step forward giving the actual userbase (and not only the miners) a voice. For example just recently 99% of all ~3500 Masternodes voted pro 2MB blocks in less than 24 hours. Imagine what Bitcoin could do with such a tool!

  • Expanse <3

    Cool! They do not need any incentives.

  • Expanse <3

    Nice. The biggest reward a user can get is being an active part of the Bitcoin network. 🙂