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Date: Wed, 10 Feb 2016 21:15:37 +0000
From: Chris Belcher <belcher@riseup.net>
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Subject: [bitcoin-dev] Clearing up some misconceptions about full nodes
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I've been asked to post this to this mailing list too. It's time to
clear up some misconceptions floating around about full nodes.

=== Myth: There are only about 5500 full nodes worldwide ===

This number comes from this and similar sites: https://bitnodes.21.co/
and it measured by trying to probe every nodes on their open ports.

Problem is, not all nodes actually have open ports that can be probed.
Either because they are behind firewalls or because their users have
configured them to not listen for connections.

Nobody knows how many full nodes there are, since many people don't know
how to forward ports behind a firewall, and bandwidth can be costly, its
quite likely that the number of nodes with closed ports is at least
another several thousand.

Nodes with open ports are able to upload blocks to new full nodes. In
all other ways they are the same as nodes with closed ports. But because
open-port-nodes can be measured and closed-port-nodes cannot, some
members of the bitcoin community have been mistaken into believing that
open-port-nodes are that matters.

=== Myth: This number of nodes matters and/or is too low. ===

Nodes with open ports are useful to the bitcoin network because they
help bootstrap new nodes by uploading historical blocks, they are a
measure of bandwidth capacity. Right now there is no shortage of
bandwidth capacity, and if there was it could be easily added by renting
cloud servers.

The problem is not bandwidth or connections, but trust, security and
privacy. Let me explain.

Full nodes are able to check that all of bitcoin's rules are being
followed. Rules like following the inflation schedule, no double
spending, no spending of coins that don't belong to the holder of the
private key and all the other rules required to make bitcoin work (e.g.
difficulty)

Full nodes are what make bitcoin trustless. No longer do you have to
trust a financial institution like a bank or paypal, you can simply run
software on your own computer. To put simply, the only node that matters
is the one you use.

=== Myth: There is no incentive to run nodes, the network relies on
altruism ===

It is very much in the individual bitcoin's users rational self interest
to run a full node and use it as their wallet.

Using a full node as your wallet is the only way to know for sure that
none of bitcoin's rules have been broken. Rules like no coins were spent
not belonging to the owner, that no coins were spent twice, that no
inflation happens outside of the schedule and that all the rules needed
to make the system work are followed  (e.g. difficulty.) All other kinds
of wallet involve trusting a third party server.

All these checks done by full nodes also increase the security. There
are many attacks possible against lightweight wallets that do not affect
full node wallets.

This is not just mindless paranoia, there have been real world examples
where full node users were unaffected by turmoil in the rest of the
bitcoin ecosystem. The 4th July 2015 accidental chain fork effected many
kinds of wallets. Here is the wiki page on this event
https://en.bitcoin.it/wiki/July_2015_chain_forks#Wallet_Advice

Notice how updated node software was completely unaffected by the fork.
All other wallets required either extra confirmations or checking that
the third-party institution was running the correct version.

Full nodes wallets are also currently the most private way to use
Bitcoin, with nobody else learning which bitcoin addresses belong to
you. All other lightweight wallets leak information about which
addresses are yours because they must query third-party servers. The
Electrum servers will know which addresses belong to you and can link
them together. Despite bloom filtering, lightweight wallets based on
BitcoinJ do not provide much privacy against nodes who connected
directly to the wallet or wiretappers.

For many use cases, such privacy may not be required. But an important
reason to run a full node and use it as a wallet is to get the full
privacy benefits.

=== Myth: I can just set up a node on a cloud server instance and leave
it ===

To get the benefits of running a full node, you must use it as your
wallet, preferably on hardware you control.

Most people who do this do not use a full node as their wallet.
Unfortunately because Bitcoin has a similar name to Bittorrent, some
people believe that upload capacity is the most important thing for a
healthy network. As I've explained above: bandwidth and connections are
not a problem today, trust, security and privacy are.

=== Myth: Running a full node is not recommended, most people should use
a lightweight client ===

This was common advice in 2012, but since then the full node software
has vastly improved in terms of user experience.

If you cannot spare the disk space to store the blockchain, you can
enable pruning as in:
https://bitcoin.org/en/release/v0.11.0#block-file-pruning. In Bitcoin
Core 0.12, pruning being enabled will leave the wallet enabled.
Altogether this should require less than 1.5GB of hard disk space.

If you cannot spare the bandwidth to upload blocks to other nodes, there
are number of options to reduce or eliminate the bandwidth requirement
found in https://bitcoin.org/en/full-node#reduce-traffic . These include
limiting connections, bandwidth targetting and disabling listening.
Bitcoin Core 0.12 has the new option -blocksonly, where the node will
not download unconfirmed transaction and only download new blocks. This
more than halves the bandwidth usage at the expense of not seeing
unconfirmed transactions.

Synchronizing the blockchain for a new node has improved since 2012 too.
Features like headers-first
(https://bitcoin.org/en/release/v0.10.0#faster-synchronization) and
libsecp256k1 have greatly improved the initial synchronization time.

It can be further improved by setting -dbcache=6000 which keeps more of
the UTXO set in memory. It reduces the amount of time reading from disk
and therefore speeds up synchronization. Tests showed that the entire
blockchain can now be synchronized in less than _3 and a half hours_
(See
https://github.com/bitcoin/bitcoin/pull/6954#issuecomment-154993958)
Note that you'll need Bitcoin Core 0.12 or later to get all these
efficiency improvements.

=== How to run a full node as your wallet ===

I think every moderate user of bitcoin would benefit by running a full
node and using it as their wallet. There are several ways to do this.

* Run a bitcoin-qt full node (https://bitcoin.org/en/download).

* Use wallet software that is backed by a full node e.g. Armory
(https://bitcoinarmory.com/) or JoinMarket
(https://github.com/AdamISZ/JMBinary/#jmbinary)

* Use a lightweight wallet that connects only to your full node (e.g.
Multibit connecting only to your node running at home, Electrum
connecting only to your own Electrum server)

So what are you waiting for? The benefits are many, the downsides are
not that bad. The more people do this, the more robust and healthy the
bitcoin ecosystem is.